Introduction of Tax Deduction
With an objective of ensuring smooth rollout of GST, the provisions of Tax Deduction at Source (Section 51 of the CGST / SGST Act 2017) and Tax Collection at Source (Section 52 of the CGST/SGST Act, 2017) has been postponed. Thereby, Persons who will be liable to deduct or collect tax at source will be required to take registration, but the liability to deduct or collect tax will arise from the date the respective sections are brought in force. It has further been clarified that persons supplying goods or services through electronic commerce operator liable to collect tax at source would not be required to obtain registration immediately, unless they are so liable under Section 22 or any other category specified under Section 24 of the CGST Act, 2017.
The GST Council in the 26th GST council meeting, held on 10.03.2018 decided that the provisions for TDS under section 51 of the CGST Act and TCS under section 52 of the CGST Act shall remain suspended till 30.06.2018.
Notification No. 33/2017 – Central Tax has appointed 18th September 2017notifies 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:
The Notification also states that TDS provisions shall come into effect from a date to be notified subsequently, on the recommendations of the Council, by the Central Government. Press Release issued by the Government highlighting decisions of 26 thGST Council
Meeting held on 10.03.2018,reads that the provisions for TDS under section 51 of CGST Act, 2017 and TCS under section 52 of CGST Act, 2017 shall remain suspended till 30.06.2018
This section provides for deduction of tax at source in certain circumstances. The Section specifically lists out the deductors who are mandated by the Central Government to deduct tax at source, the rate of tax deduction and the procedure for remittance of the tax deducted. The amount of tax deducted is reflected in the Electronic Cash Ledger of the deductee.