Section 51 of GST – Tax deduction at source
Section 51 of GST – Tax deduction at source. Check GST Section 51 In this section you may find all details for Tax deduction at source as per GST Act 2017. We Provide Complete Details for All GST Section’s and In this article you may find all details for GST Section 51. Check Section Wise Analysis of GST Act 2017, Chapter Wise Analysis of GST All Sections. in this article you may find complete details regarding Section 51 of GST Act 2017 – Tax deduction at source, gst all sections and definitions. Now Check more details from below…..
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Update – Section 51 of the CGST Act, 2017 notified
Central Government vide Notification No. 33/2017-Central Tax, dt. 15-09-2017 has provided that section 51 of the CGST Act, 2017 will be effective w.e.f 18th September 2017 with respect to the persons specified below:
- (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
However, the date from which the tax needs to be deducted from the payment made or credited to the supplier of taxable goods or services or both will be notified separately
Section 51 of GST – Tax deduction at source
(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.
(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.
(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-day period until the failure is rectified, subject to a maximum amount of five thousand rupees.
(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.
(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.
(7) The determination of the amount in default under this section shall be made in the manner specified in section 73 or section74.
(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.
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.
Notification No. 50/2018 Central Tax dated 13.09.2018 seeks to bring section 51 of the CGST Act (provisions related to TDS) into force w.e.f 01.10.2018. Reference may be had to circular 76/50/2018-GST dated 31 December, 2018 which makes it clear that the 51% condition is applicable to both limbs of ‘authority or board’ appearing in notification issued under section 51(1)(d) (under para (a) above).
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.
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