The 60-second version
Section 206CG requires scrap seller to collect TCS on sale consideration — returning NRIs operating metal scrap yards must file Form 27EQ quarterly.
Scrap TCS is separate from GST — collect on each PAN-backed sale above threshold
Section 206CG applies when you sell scrap for consideration — buyer PAN mandatory for TCS credit.
Returning NRIs restarting family scrap yard must obtain TAN and file Form 27EQ before first quarter ends.
Mineral lane: Section 206CM guide for coal/lignite outright sales.
206CG matrix
| Seller | Buyer | Form |
|---|---|---|
| Scrap dealer | PAN holder | 27EQ |
| Non-filer buyer | 206CCA rate | 27EQ |
| GST registered | GST + TCS | GSTR-1 + 27EQ |
| Penalty miss | 206CA | AO notice |
Compliance
TAN
Apply if new dealer.
Buyer PAN
Collect each sale.
Collect TCS
206CG or 206CCA.
File 27EQ
Quarterly.
GST return
If registered.
Flow
206CG kit
- TAN.
- Weighbridge slips.
- Buyer PAN.
- 27EQ.
- Stock register.
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Weighbridge proof
Retain weighbridge and gate-pass records — AO may reconcile TCS with outward scrap register.
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206CG vs GST?
Both may apply — TCS is income-tax collection; GST is indirect tax on supply.
206CCA?
Higher TCS if buyer failed prior ITR filing.
Cash sale?
PAN still required above threshold — verify with CA.
RNOR?
Collection obligation applies if you hold active scrap dealer license.
Penalty?
Section 206CA if TCS not collected or deposited.
Export scrap?
Export may be zero-rated GST — TCS rules differ; verify LUT status.
Your tax year is already running.
RNOR status, exit timing, and DTAA benefits all depend on decisions you make before you land. Don't guess.