With the introduction of the GST in 2017, Section 51 of the CGST Act outlined provisions for Tax Deducted at Source (TDS), but it was enforced only from October 2018. Initially, the TDS requirement applied solely to government bodies and public sector units (PSUs). However, the GST Council has expanded these provisions to the metal scrap sector, based on the recommendations from its 54th meeting. Two key changes were introduced: (1) A Reverse Charge Mechanism (RCM) for the supply of metal scrap by unregistered persons to registered persons, making the recipient liable to pay GST if the supplier surpasses the registration threshold. (2) A 2% TDS on business-to-business (B2B) metal scrap supplies from registered suppliers. On October 9, 2024, the government issued Notification 25/2024-Central Tax, implementing the TDS provisions for registered recipients of metal scrap. These rules become effective from October 10, 2024. This notification mandates that registered persons receiving metal scrap under chapters 72 to 81 of the Customs Tariff Act must deduct tax at source when making payments to registered suppliers. The general TDS rate under the CGST and SGST Acts is 1% each, making the total deduction 2% for intra-state supplies, while inter-state supplies are subject to the same rate under the IGST Act.
MINISTRY OF FINANCE
(Department of Revenue)
Notification No. 25/2024-Central Tax | Dated: 9th October, 2024.
G.S.R. 629(E).— In exercise of the powers conferred by sub-section (3) of section 1 read with section 51 of the Central Goods and Services Tax Act, 2017 (12 of 2017), hereafter in this notification referred to as the said Act, the Central Government, on the recommendations of the Council, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance, Department of Revenue notification no. 50/2018- Central Tax, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R 868 (E), dated 13th September, 2018, namely:–
In the said notification,
(i) after clause (c) and before the first proviso, the following clause shall be inserted,-
“(d) any registered person receiving supplies of metal scrap falling under Chapters 72 to 81 in the
First Schedule to the Customs Tariff Act, 1975 (51 of 1975), from other registered person”;
(ii) for the third proviso, the following proviso shall be substituted, namely-
“Provided also that nothing in this notification shall apply to the supply of goods or services or both, which takes place between one person to another person specified under clauses (a), (b), (c) and (d) of sub-section (1) of Section 51 of the said Act, except the person referred to in clause (d) of this notification.”
2. This notification shall come into force with effect from the 10th day of October, 2024.
[F No. CBIC-190354/149/2024-TO(TRU-II)]
AMREETA TITUS, Dy. Secy.
Note:- The principal notification no. 50/2018- Central Tax, was published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R 868 (E), dated 13th September, 2018 and last amended vide notification no. 73/2018-Central Tax, number G.S.R 1250(E), dated 31st December, 2018.
