CBDT releases FAQ on TCS vide Circular No. 22/2016 dtd 08-06-2016:

1.     TCS on Motor Vehicles exceeding 10 lacs is applicable to retail sale to customers only .

2.     TCS on motor vehicles exceeding 10 lacs is not applicable to transactions between manufacturer to dealer/distributors

3.     TCS @1% is not limited to luxury cars and includes all motor vehicles

4.     Sale to Government, UN Instituions, Foreign Embassies etc. are not exigible to TCS

5.     TCS on motor vehicle is applicable on single transactions exceeding ten lacs and aggregate of transactions not to be done for the purpose of threshold limit of 10 lacs.

6.     TCS to be collected on the booking/advance also @ 1%.

7.     If Motor Vehicle for Rs. 20 lacs is sold and booking advance is taken at Rs. 5 lacs and later Rs. 15 lacs is taken, then first collect 1% on 5 lacs and later 1% on 15 lacs.

8.     An Individual who is liable to Audit u/s 44AB in immediately preceeding financial year is liable for collection of TCS [As per S.206C Explanation ©, An individual or HUF covered by 44AB(a)/(b) is only liable for TCS , which means that if in the case of Individual or HUF turnover is lesser than one crore in case of business or Rs 25 lacs in case of profession, TCS is not applicable]

9.     TCS on motor vehicle is independent of the mode of payment i.e. TCS is applicable whether payment is made in cash or cheque.

If Motor vehicle is sold for more than 10 lacs, then TCS is applicable u/s 206C(1F), but if motor vehicle is sold for lesser than 10 lacs, and payment is received in cash then TCS shall be applicable u/s 206C(1D). Section 206C(1F) and S.206C(1D) can not apply simultaneously