23 Understanding TCS

This chapter contains the following topics:

23.1 Overview of TCS

Tax collected at source (TCS) is a federal tax that customers are charged on goods. Suppliers that sell the goods are responsible for charging TCS to their customers and collecting the amount, as well as remitting the TCS amount to tax authorities. TCS is applicable either at the time of debiting the customer or receiving the money from the customer during sale of notified goods, whichever is earlier. Suppliers are required to remit the TCS amount to the tax authority and issue the certificate Form 27D to the customer within ten days of receiving the payment.

23.2 Process Flow for TCS

This process flow shows the steps that a supplier performs to charge, collect, and remit TCS:

The process flow for collecting and remitting TCS is different for prepayments. When a customer makes a prepayment without the sales order and invoice, you adjust it with the next invoice for that customer and submit the TCS on that amount to the government.

See Working with TCS Prepayments and Payments.

23.3 Software Solution for TCS

To meet the TCS requirements specified by the tax authorities, the JD Edwards EnterpriseOne programs enable you to:

  • (Rounding feature pertains to Release 9.1 Update) Create a sales order, round the taxable amount, and calculate TCS for items that are eligible for TCS.

  • Issue a tax invoice to charge TCS to customers for goods purchased.

  • Verify and update TCS amount in localized tables

  • Print Form 27D for customers to acknowledge receipt of TCS on goods sold.

  • Create a voucher and payment for TCS owed to tax authorities.

23.4 Setup Requirements for TCS

This table lists the TCS setup requirements for India:

Setup Requirement Comments Cross-Reference
Set up tax types and adjustments for TCS. You use the Price & Adjustment Details Revisions program (P4072) to enter price adjustment details. See Entering Price Adjustment Details for India Taxes.
Verify that the adjustment name is set up in UDC table 40/TY. You use the 40/TY UDC table to set the adjustment name. n/a
Map tax adjustments to tax types. You use the Relation Adjustment Name / Tax Type program (P75I006) to enter the tax type and tax regime for a price adjustment name. See Entering Price Adjustment Details for India Taxes.
Enter supplier records for TCS tax authorities. You create an address book number for tax authority using Address Book Revisions program (P01012). See "Setting Up Tax Authorities" in the JD Edwards EnterpriseOne Applications Tax Processing Implementation Guide.