Provisions under Section 51 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Tax Deduction at Source (TDS)”, are as under:
Section 51 of CGST Act 2017: Tax Deduction at Source (CHAPTER X – PAYMENT OF TAX)
(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. [sub-section (2) still pending commencement]
(3) A certificate of tax deduction at source shall be issued in such form and in such manner as may be prescribed. [substituted sub-section (3) from 01/01/2021: refer Note 1]
(4) [sub-section (4) omitted from 01/01/2021: refer Note 2]
(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. [sub-section (5) still pending commencement]
(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. [sub-section (6) still pending commencement]
(7) The determination of the amount in default under this section shall be made in the manner specified in section 73 or section 74. [sub-section (7) still pending commencement]
(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. [sub-section (8) still pending commencement]
| Note: CBIC notifies 01/10/2018 as the Commencement date for certain provisions of Section 51 of the CGST Act 2017, vide Central Tax Notification 50/2018 dt. 13/09/2018. Accordingly, from 01/10/2018, the provisions of section 51 with respect to persons specified under clauses (a), (b) and (c) of sub-section (1) and the persons specified below for the purpose of clause (d) of sub-section (1) shall be applicable as per above Notification,- (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. Please refer TDS/ TCS under GST Applicability and Exemption to understand the applicability and exemptions. |
Amendments History:
1. Sub-section (3) substituted vide Section 124 of the Finance Act 2020, followed with Notification 92/2020 on commencement date of 01/01/2021. Sub-section (3) before substitution:
(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. [sub-section (3) substituted from 01/01/2021: refer Note 1]
2. Sub-section (4) omitted vide Section 124 of the Finance Act 2020, followed with Notification 92/2020 on commencement date of 01/01/2021. Sub-section (4) before omission:
(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. [sub-section (4) omitted from 01/01/2021: refer Note 2]
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| CGST Act 2017: Last updated 15/02/2024 |
| The CGST Act 2017 has been notified vide GOI Notification dated 12/04/2017, which has subsequently been amended through the CGST (Extension to J&K) Act 2017, Finance Act 2018, CGST Amendment Act 2018, Finance Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance/Act 2020, Finance Act 2021, Finance Act 2022, Finance Act 2023, CGST Amendment Act 2023, CGST Second Amendment Act 2023 & Finance Act, 2024 including various Notifications/Orders issued by the Govt./ CBIC from time to time, relating to the commencement dates of various sections and provisions in the respective CGST/Amendment Acts, wherever required. Information on this page is a section-wise compilation of the amendments to the CGST Act, 2017 made through various notifications issued by CBIC from time to time (upto 15th February, 2024), with the best possible efforts for accuracy. In any case, E&OE. For official or updated information, please visit the CBIC website. |
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