Changes in TDS applicability under GST-CGST Notification dated 09.10.2024!

On October 9, 2024, the Central Government issued a significant update regarding the Tax Deducted at Source (TDS) under the Goods and Services Tax (GST) regime through a new CGST Notification. These changes are set to impact both taxpayers and businesses by modifying the applicability of TDS provisions. Understanding these amendments is crucial for businesses to remain compliant and avoid any inadvertent errors in tax deductions and remittances. 

Let’s understand the notification!

Notification No. 25/2024-Central Tax dated 09^th October, 2024

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

New Delhi: 09.10.2024

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Notification No. 25/2024-Central Tax:

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G.S.R. 629(E).- In exercise of the powers conferred by sub-section (3) of section 1 read with section 51 of the Central Goods and Services Tax Act, 2017 (12 of 2017), hereafter in this notification referred to as the said Act, the Central Government, on the recommendations of the Council, at this moment makes the following further amendment in the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 50/2018-Central Tax, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R 868 (E), dated 13th September, 2018, namely: -

In the said notification,

1) After clause (c) and before the first proviso, the following clause shall be inserted, -

"(d) Any registered person receiving supplies of metal scrap falling under Chapters 72 to 81 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), from another registered person";

2) For the third proviso, the following proviso shall be substituted, namely-

"Provided also that nothing in this notification shall apply to the supply of goods or services or both, which takes place between one person to another person specified under clauses (a), (b), (c) and (d) of sub-section (1) of Section 51 of the said Act, except the person referred to in clause (d) of this notification."

This notification shall come into force with effect from the 10th day of October, 2024.

[F No. CBIC-190354/149/2024-TO(TRU-II)]

AMREETA TITUS, Dy. Secy.

Key Highlights of Changes in TDS Applicability under GST
(CGST Notification dated 09.10.2024)

• Notification no. 50/2018- Central Tax dated 13.09.2018 specifies the list of persons who are required to deduct TDS under GST. This list is in addition to the persons specified in section 51 of the CGST Act, 2017. 
• This notification is amended by way of Notification No. 25/2024-Central Tax dated 09.10.2024. As per the amendment, any registered person receiving supplies of metal scrap from another registered person shall also deduct TDS under GST.
• Also, TDS is required to be deducted even if any person specified in the list of persons required to deduct TDS (For example, Central Government, State Government, etc.) receives metal scrap from a registered person.
• These changes are effective from 10.10.2024.
• The updated list of persons required to deduct TDS is as follows:

• Persons specified in Section 51(1) of the CGST Act, 2017:

1. A department or establishment of the Central Government or State Government; or

2. Local authority; or

3. Governmental agencies

• Persons specified in Notification 50/2018 as amended:

(a) An authority or a board or any other body, -

1. Set up by an Act of Parliament or a State Legislature; or

2. 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

(d) A the registered person receiving supplies of metal scrap falling under Chapters 72 to 81 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), from another registered person

Conclusion

The CGST Notification dated 09.10.2024 introduces significant changes to the applicability of TDS under the GST regime, which will have far-reaching implications for businesses and taxpayers alike. With updated thresholds, revised TDS rates, and more robust compliance mechanisms, the landscape of GST-related TDS is evolving. Businesses must remain proactive in understanding these amendments, ensuring timely filings, and adhering to the new requirements to avoid penalties. While these changes may initially pose challenges, they aim to streamline the tax deduction process, enhance transparency, and strengthen the GST system as a whole.