3576728 - Finance Bill 2025: Abolition of TCS under Section 206C(1H) - S/4HANA Cloud Public Edition - GST IN

Starting April 1, 2025, the requirement for sellers to collect TCS on goods sales exceeding  ₹50 lakh under Section 206C(1H) is omitted.
This amendment aims to reduce compliance burdens for sellers and eliminate duplication with Section 194Q, which requires buyers to deduct Tax Deducted at Source (TDS) on similar transactions.

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SAP S/4HANA Cloud Public Edition

Legal change

Steps to delimit TCS calculation:

1.Modify the validity end of JTC1 and JTCB condition records to 31^st March 2025

Note: These condition names JTC1 and JTCB might be different in your system and verify to find the correct condition names mapped for the pricing procedure(s) in SCCUI: 101934.

Once identified, Check in the SET TAX RATES - sales  app  for corresponding condition records.

2.Check if the pricing type in copy control settings is set to redetermine taxes. If the pricing type is set to "Fix values" or "Unchanged" system will copy the JTC1 condition value from source document without redetermining it.

 
To check the copy control settings,

go to SSCUI:102763  if the invoice is created w.r.t delivery (or)

SSCUI: 102762 if the invoice is created w.r.t sales order (or)

SSCUI:102764  if the invoice is created w.r.t another billing document.

(e.g. B , C or G based on your business scenario)

3.For invoices you wish to post in the current financial year without TCS, pass the appropriate pricing date (>01.04.2025) to avoid TCS being calculated.

e.g if the goods issue date was within TCS condition record validity (<31.03.2025), same would be passed as pricing date (service rendered date) resulting in TCS calculation in the billing document. In such cases, pricing date needs to be modified as per your business needs.

 
Based on the pricing date control, you have maintained in SSCUI: 101120  the pricing date will be determined. Pass the correct date as per your configuration

 
4.When posting direct FI invoices via FB70/FB75, select a tax code that does not use TCS tax condition type.

This change necessitates adjustments in your SAP S/4HANA Cloud system to ensure compliance and avoid errors. Follow these recommendations:

1. Tax Codes with Only TCS 206C(1H):

• Stop using any tax codes in SAP S/4HANA Cloud that exclusively contain the TCS rate under Section 206C(1H) from April 1st, 2025.
• Modify the description of these tax codes to clearly state "Not Applicable from April 1st, 2025" to prevent accidental usage.

2. Tax Codes with Combined GST and TCS 206C(1H):

• If you already have tax codes with just GST rates, use those instead of the combined ones.
• Create new tax codes containing only the applicable GST rates. This is the preferred approach for clarity and future maintenance.
• Similar to the previous point, update the description of the combined GST and TCS tax codes to indicate "Not Applicable from April 1st, 2025".

3. Avoid Modifying Existing Tax Codes with TCS:

• Modifying existing tax codes with TCS rates can lead to inconsistencies when reversing documents posted before April 1st, 2025.
• If you need to post documents with posting dates prior to April 1st, 2025, during year-end closing activities in April or May, those original tax codes will be required.
• Changing previously used tax codes can compromise the integrity of your financial records.
• Hence do not modify the TCS rates in tax codes that have been used in prior financial postings.

3574318 - Finance Bill 2025: Abolition of TCS under Section 206C(1H)

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