Regarding TDS under GST for Metal Scrap

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Suresh S. Tejwani (Querist)
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10 October 2024 IS THERE ANY THRESHOLD LIMIT FOR DEDUCT TDS UNDER GST ON PURCHASE OF METAL SCRAP? IF YES, THEN WHAT AMOUNT AS THRESHOLD?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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10 October 2024 The following enterprises have to deduct TDS at the rate of 2% (1% SGST +1% CGST) from the payment made or credited to a supplier for the taxable supplies of value greater than Rs. 2.5 lakh.
The limit of Rs. 2.5 lakh is for a single contract and not for aggregate value in a month or year.

Thus, individual supplies may be less than Rs. 2,50,000/-, but if contract value is more than Rs. 2,50,000/-, TDS will have to be deducted.
The value of supplies will be taken as amount excluding GST and cess.

Department or establishment of the Central or State Government
Local authority
Governmental agencies
Such persons or category of persons as may be notified, by the Central or a State Government on the recommendations of the Council.
The following entities are notified via Notification no. 33/017.

(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

Suresh S. Tejwani

Suresh S. Tejwani (Querist)
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10 October 2024 GREATER THAN 2.5 LAKH IS APPLICABLE FOR METAL SCRAP BY ANY REGISTERED PERSON OTHER THAN GOVERNMENT ENTITY. (AS PER NOTIFICATION NO. 25/2024 AS ON 9 OCTOBER, 2024)

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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10 October 2024 A person engaged in supply of metal scrap falling under Chapters 72 to 81 of the First Schedule to the CT Act would be required to obtain GST registration upon surpassing the threshold limits / conditions provided under Sections 22 / 24 of the CGST Act and cannot claim exemption from obtaining GST registration as provided in Notification No. 05/2017-Central Tax dated 19 June 2017.
Further, a registered person receiving supplies of metal scrap falling under Chapters 72 to 81 in the First Schedule to the CT Act, from other registered person would attract the liability to deduct tax at source under Section 51 of CGST Act.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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11 October 2024 Good luck ....

Suresh S. Tejwani

Suresh S. Tejwani (Querist)
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12 October 2024 IN PRUCHASE OF METAL SCRAP, TDS DEDUCTED ONLY IF AMOUNT IS GREATER THEN 2,50,000?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 October 2024 Yes..

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