TDS/ TCS Provisions under GST partly Deferred/ Postponed by CBEC (GoI)

Provision relating to TDS/  TCS under Sections 51/ 52 of the CGST/ SGST Act 2017 stands Postponed/ Deferred partly: CBEC/ GoI

In view of the concerns of trade and industry regarding the provisions of TDS/ TCS under Sections 51/ 52 of the CGST/ SGST Act 2017 and to ensure smooth GST rollout, the CBEC/ GoI has decided to partly defer/ postpone the applicability of provisions relating thereto, i.e. no TDS/ TCS till further notification, however registration required to be obtained for TDS/ TCS in certain cases, as under:

1. 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) will be brought into force from a future date to be communicated later.

2. Persons who will be liable to deduct/ collect tax at source will be required to take registration, but the liability to deduct/ collect tax will arise from the date of the applicability of the respective sections as may be notified later in due course.

3. The persons who were liable to be registered under Section 24(ix) of the CGST/ SGST Act, 2017 (as they were supplying goods or services through electronic commerce operator who is required to collect tax at source under Section 52) will not be liable to register till the provision of Tax Collection at Source is brought under force. In other words, 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 / SGST Act, 2017.

In short, we can say that Govt. has taken the decision to partly defer/ postpone the provisions relating to TDS/ TCS during the initial period of commencement of GST Regime w.e.f. 1 July 2017 to provide additional time to persons who are liable to deduct tax at source/ E-Commerce Companies and their suppliers to smoothly migrate and adapt with the new procedures.

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