Form 27C

Meaning & Definition

A Form 27C is an application, made by the buyer to the seller, requesting that tax collected at source (TCS) not be collected on goods purchased for purposes of manufacturing, processing or producing. Form 27C helps ensure that the correct tax is applied to eligible transactions, as described in the Income Tax Act.

Important features of Form 27C

• Eliminates excess TCS collection on eligible purchases.
• Enables better control of working capital through the reduction of excess cash spent on taxes. 
• Ensures that tax is reported correctly for any operation involving the manufacture of goods.
• Supports compliance with TCS requirements in the business operations of others.
• Enhances the level of transparency concerning both purchase and tax record keeping.

Legal & Regulatory Considerations 

• To obtain a TCS exemption, the buyer must give the seller a Form 27C.
• Only if the goods are consumed in the course of engineering or manufacturing processes will Form 27C be applicable.
• The seller shall submit all received declarations to the revenue authorities on time.