CBIC notifies that Section 51 of the CGST Act (provisions related to TDS) will come into force w.e.f 01.10.2018 vide Notification No. 50/2018 – Central Tax Dated: 13th September, 2018

Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
New Delhi
Notification No. 50/2018 – Central Tax
Dated: 13th September, 2018

G.S.R. 868(E).— In exercise of the powers conferred by sub-section (3) of section 1 of the Central Goods and Services Tax Act, 2017 (12 of 2017) and in supercession of the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 33/2017-Central Tax, dated the 15th September, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1163 (E), dated the 15th September, 2017, except as respects things done or omitted to be done before such supersession, the Central Government hereby appoints the 1st day of October, 2018, as the date on which the provisions of section 51 of the said Act shall come into force with respect to persons specified under clauses (a), (b) and (c) of sub-section (1) of section 51 of the said Act and the persons specified below under clause (d) of sub-section (1) of section 51 of the said Act, namely:‑

(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 per cent. 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.

[F. No. 349/58/2017-GST(Pt.)]

(Gunjan Kumar Verma)

Under Secretary to the Government of India

—-
Extract of Section 51 of CGST Act,2017 – Tax deduction at source (TDS)

Section 51 of CGST Act,2017 from bare act : –

(1) Notwithstanding anything to the contrary contained in this Act, the Government may mandate,––

(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,

(hereafter in this section referred to as “the deductor”), to deduct tax at the rate of one per cent. from the payment made or credited to the supplier (hereafter in this section referred to as “the deductee”) of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees:Provided that no deduction shall be made if the location of the supplier and the place of supply is in a State or Union territory which is different from the State or as the case may be, Union territory of registration of the recipient.

Explanation.––For the purpose of deduction of tax specified above, the value of supply shall be taken as the amount excluding the central tax, State tax, Union territory tax, integrated tax and cess indicated in the invoice.

(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 therein the contract value, rate of deduction, amount deducted, amount paid to the Government and such other particulars in such manner as may be prescribed.

(4) If any deductor fails to furnish to the deductee the certificate, after deducting the tax at source, within five days of crediting the amount so deducted to the Government, the deductor shall pay, by way of a late fee, a sum of one hundred rupees per day from the day after the expiry of such five days period until the failure is rectified, subject to a maximum amount of five thousand rupees.

(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 prescribed.

(6) If any deductor fails to pay to the Government the amount deducted as tax under sub-section (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.

(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) The refund to the deductor or the deductee arising on account of excess or erroneous deduction shall be dealt with in accordance with the provisions of section 54:Provided that no refund to the deductor shall be granted, if the amount deducted has been credited to the electronic cash ledger of the deductee

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27 Comments

  1. ROBERT RODRIGUES says:

    I HAVE GIVEN A SHOP TO BANK FOR ATM. I AM GETTING ANNUAL RENT OF RS.2.25 LAKHS. THE AGREEMENT IS FOR 12 YEARS MADE IN THE YEAR 2008. THE TOTAL RENT FOR 12 YEARS IS ABOUT RS.20 LAKHS. AS THE CONTRACT VALUE IS MORE THAN RS.2.5 LAKHS FOR 12 YEARS, THE BANK IS DEDUCTING 2%. IS IT IN ORDER TO DEDUCT TAX AS ANNUAL PAYMENT IS LESS THAN RS.2.5 LAKHS.

  2. Mr.Ankit Jain says:

    We are supplying Laboraory Chemicals /glassware to Govt Instt and they are deducting 2% TDS on our Taxable amount on bills . Is this correct to deduct TDS from our Invoices as we are supplying General lab items or TDS is deducted only in case of Contractors. Plz reply on urgent basis

  3. Joydeep Mukherjee says:

    I am an employee of a PSU. We have contractual security agencies. The rate of security agency is dependent on notified Minimum wage rate of State Govt. Is GST TDS applicable on payment?

  4. Midhun says:

    I am working in a Central Government Commodity Board and purely working on Govt. grants. We are already having GSTIN and we are filing GST returns every month. Hence we want to know whether, is this new rule is applicable to us?

    Further what about the TDS of Income tax. Does it get clash with TDS of GST ?

  5. Nemchand T Kale says:

    This Sub division under Zilla Parishad. Works of office such as supplying hard murum, metal at village or vadi/vasti road. Murum, metal royalty is recovered at the time of billing.. such works alloted to Grampanchayat (village panchayat) & work vallue is up to 3.00 lack. As per my knowledge above works no GST. becaus this work is murum & metal & work done by village panchayat. Pl. explain me.

  6. Johnsy says:

    if case of public works,if work is done before 30th september 2018, but the work bill is submitted in treasury for payment in october 2018..is it necessary to deduct TDS ?

      1. VIJAY KUMAR says:

        In my view Services of Electricity is exempt under exemption notification 12/2017 hence electricity supply is an exempt supply so no TDS applicable.
        But Telephone utility is not covered by any exemption so if in a year you may more than 2.5 lac or any time during the year you pay more than 2.5 lac to the specific telephone operator deduct 2% TDS. Oher learned members comment are welcome.

  7. Sushil Kumar Jha says:

    some dought are there if it is this rule applicable to goods and Service received by Private Limited Company or on all Government Sector

    1. V SANTHANAM says:

      We are PSU Company namely Andrew Yule & Co Limited having factory at Chennai manufacturing of Power Transformers. For making transformers we are procuring raw materials and other components from various GST registered vendors, Whether TDS on GST is applicable for the above all raw material purchases which more than Rs 2.50lakhs

    2. VIJAY KUMAR says:

      This is applicable to only specified people mainly to the GOVT sector. these are the following people.
      Person responsible for TDS a) A department or establishment of Central Govt or State Govt, or local authority or Govt Agencies
      b) An authority or a board or any other body which has been set up by Parliament or a State Legislature or by a government, with 51% equity (control) owned by the government
      c) Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860
      d) public sector undertakings (PSUs)

  8. Shivu says:

    A person is having only one taxi and hired to a Govt dept for a period of one year at tender rate of Rs 40,000/ month and payments made monthly. Whether tds is applicable

    1. VIJAY KUMAR says:

      Depend on the contract, in the present case it seems it is already awarded for 1 year and value is 2.8 lacs so TDS applicable @ 2% from 01.10.2018 onwards only.

  9. prakash chand jatoliya says:

    work order given in may 2018 gods supplyed in set 2018 company rasied bill in set 2018 ddo know making paymnet in the month of octo 2018 tds applicable at the time of paymnet

    1. VIJAY KUMAR says:

      No, TDS is not applicable, please read para 4 of standard operating procedures issued by the GST WEBSITE. Only Taxable supply of the period after 01.10.2018 are liable to GST TDS.

    1. VIJAY KUMAR says:

      No, It is not applicable to Private Enterprises, It is only applicable to Govt departments.

      Person responsible for TDS a) A department or establishment of Central Govt or State Govt, or local authority or Govt Agencies
      b) An authority or a board or any other body which has been set up by Parliament or a State Legislature or by a government, with 51% equity (control) owned by the government
      c) Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860
      d) public sector undertakings (PSUs)

  10. chetan says:

    we provides services to sbi bank so they will
    make payment above 3L per bill we want shows tds in gst because sbi part of govt so gude me this case

  11. chandresh goswami says:

    whether 1% is applicable or 2%? beacause in Circular No. 65/39/2018-DOR dated 14/09/2018 it is mentioned that 2% will be applicable in case of TDS by DDO

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