GST rollout: TDS, TCS provisions postponed for E-commerce companies

Ministry of Finance on Monday announced the postponement of provisions related to tax deducted at source and Tax collection at source of CGST/SGST Act 2017.

In a notification, Ministry said that in order to ensure smooth rollout of Goods and Service Tax (GST), the postponement of the provision will relating to TDS (Section 51) and TCS (Section 52) of the Central GST and State GST Act, 2017 has been taken to provide more time for persons liable to deduct tax at source, e-commerce companies and their suppliers to prepare for GST.

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"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 date which will be communicated later," Ministry said.

Further, the Ministry said that 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 also said that the persons who were liable to be registered under clause (ix) of Section 24 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.

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According to IANS report, Section 51 deals with deductors who may be a department or establishment of the central government or state government; or local authority; or governmental agencies; or such persons or category of persons as may be notified by the government on the recommendations of the GST Council. Section 52 deals with operators who are e-commerce traders and their suppliers.

Which means, "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", Ministry explained. 

This step has been taken to provide more time for persons liable to deduct tax at source / E-Commerce Companies and their suppliers to prepare for the historic tax reform, it added.