June 4, 2003

Finance Act, 2003 extended the scheme of collection of tax at source u/s 206C of Income Tax Act, 1961 to dealers in Indian made foreign liquor (wholesaler as well as retailer). Under the scheme the seller whether it is government, corporation, manufacturer, distributor or wholesaler is required to collect from the buyer, tax @ 10% of the amount payable by the buyer at the time of sale of goods and deposit the same to the credit of Central Government. Similar provisions existed for country liquor since 1988. The scheme is to become effective from 1/6/2003.

Representations have been received from various quarters including State Government Authorities in the matter of various aspects of the scheme.

It is necessary to look into all these representations before the scheme of tax collection at source is made applicable to dealers in Indian made foreign liquor.

It has been decided to postpone the date of coming into effect of the new provisions extending the scheme of collection of tax at source from dealers in Indian made foreign liquor to 1st September, 2003.

Accordingly it is brought to the notice of State Government Authorities, manufacturers, distributors, wholesalers and retailers of Indian made foreign liquor that the scheme of collection of tax at source under section 206C of Income Tax Act, 1961, will not take effect from 1/6/2003.