Finally, the Central Government is all set to implement the provisions relating to tax deduction at source (TDS) from 18th September 2017.
As per the Central GST (CGST) Act, the notified entities are required to collect TDS at 1% on payments to suppliers of goods or services in excess of Rs 2.5 lakh.
The Notification issued on Friday specified that the following entities are liable to deduct tax at source from 18th September.
(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:
“Provided that the said persons shall be liable to deduct tax from the payment made or credited to the supplier of taxable goods or services or both with effect from a date to be notified subsequently, on the recommendations of the Council, by the Central Government,” the Notification said.
Earlier, the Government had decided to defer the implementation of provisions relating to TDS and TCS considering the difficulties of the traders. Representations were made by e-commerce firms that it would be an additional compliance burden and would lock-down working capital for merchants selling online.
The GST Council, at its 21st meeting in Hyderabad, decided to open registration of persons liable to deduct TDS and TCS from 18 September.
Read the full text of the Notification below.
