Tax Deducted at Source Section 51 of CGST Act
(1) As per section 51 of the CGST Act Tds will be deducted by the deductor (person who is the recipient of goods or services or both) while paying or credited the amount to the deductee ( person who is supplying the goods or services or both).
Deductors :
(a) a department or establishment of the Central Government or State Government; or
(b) local authority; or
(c) Governmental agencies; or
(d) such persons or category of persons as may be notified by the Government on the recommendations of the Council,
Notification No. 33/2017 — Central Tax has appointed 18th September 2017 notifies the following persons under Section 51(1)(d) as liable for TDS;
(a) an authority or a board or any other body,
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government, with fifty-one percent or more participation by way of equity or control, to carry out any function;
(b) society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860);
(c) public sector undertakings:
Notification No. 50/2018 Central Tax dated 13.09.2018 seeks to bring section 51 of the CGST Act (provisions related to TDS) into force w.e.f 01.10.2018.
Conditions for applicability of section 51 of CGST Act.
1. This section applies where the total value of such supply, under contract exceeds Rs. 250000.
2. The TDS is applicable on the payment made or credited to the supplier at the rate of 1%.
3. For the purpose of deduction tds, the value of supply shall be taken as the amount excluding CGST, SGST, UTGST, IGST and Cess.
4. No TDS is applicable where the state of supplier and place of supply is different from the state of registration of the recipient.
| Location of supplier |
Place of supply | Location of recipient |
TDS | TAX |
| Haryana | Haryana | Haryana | Yes | Haryana CGST
Haryana SGST |
| Haryana | Rajasthan | Rajasthan | Yes | IGST |
| Haryana | Haryana | Rajasthan | N.A. | N.A. |
| Haryana | Punjab | Rajasthan | Yes | IGST |
| Haryana | Rajasthan | Haryana | Yes | IGST |
(2) The amount deducted as tax under this section shall be paid to the Government by the deductor within ten days after the end of the month in which such deduction is made, in such manner as may be prescribed.
(3)The deductor shall furnish to the deductee a certificate mentioning following in the certificate:
(a) contract value,
(b) rate of deduction,
(c) amount deducted,
(d) amount paid to the Government and
(e) such other particulars in such manner as may be prescribed
(4) if any deductor fails to furnish the tds certificate under GSTR Form 7A, after deducting tax at source within 5 days from the date of crediting the amount so deducted to the government, the deductor shall pay a sum of rs. 100 per day as a late fees from the day after the expiry of such five days period until the failure is rectified, subject to a maximum amount of rs. 5000.
(5) The deductee shall claim credit, in his electronic cash ledger, of the tax deducted and reflected in the return of the deductor furnished under sub-section (3) of section 39, in such manner as may be
(6) If any deductor fails to pay to the Government the amount deducted as tax under subsection (1), he shall pay interest in accordance with the provisions of sub-section (1) of section 50, in addition to the amount of tax deducted.
Section 50(1) of the cgst act says if any person fails to pay the amount of gst to the govt. then such person is liable to pay the amount of interest on the net payable amount of gst. And as per sub section 2 of section 50 such amount of interest is calculated from the day succeeding the day on which tax was due to be paid.
(7) The determination of the amount in default under this section shall be made in the manner specified in section 73 or section 74.
(8) If the amount of tds is deducted in excess or erroneously, deductor or deductee , both can claim the refund. If once the amount is credited to the cash ledger of the deductee, only deductee can claim for refund of such excess deduction. The provisions of section 54 relating to refund would apply in such cases.
Non applicability of section 51:-
(1) As per notification no. 61/2018, dated 05.11.2018, If a PSU is supplying goods or services or both to another PSU, then the provision of this section does not apply.
If the supply of goods or services are exempt by notification, this section does not apply.
(3) TDS, however, apply even if the supplier is unregistered or composition tax payer. Reference may be had to GSTR 4 (composition) which provides table 9 ‘TDS Credit’. As regard unregistered supplier, TDS is unrecoverable. Due to repeated extensions, it is not clear if TDS can be deposited ‘Without GSTIN’ of Deductee.
Author Bio
Hello Sir,
Very Good interpretation and analysis where No TDS is deducted where the state of supplier and place of supply is different from the state of registration of the recipient.