TDS Applicability (In GST) on Scrap
This query is : Resolved
02 July 2025
Dear Sir
Our Client is Scrap Trader and he is purchases all type of scrap (i.e iron, Wood, Packinging Material, Plastic etc), so want to know regarding TDS Deduction Applicability on him. he liable to Deduct TDS of all type of scrap or only Applicable on metal scrap.
Also he not Taking the TDS registration till now , so can now he need to pay TDS from 01.10.2024 to till date (Which he is not deduct) or from TDS registration date when he obtain the same.
THANKS
Nitin Kumar
Our Client is Scrap Trader and he is purchases all type of scrap (i.e iron, Wood, Packinging Material, Plastic etc), so want to know regarding TDS Deduction Applicability on him. he liable to Deduct TDS of all type of scrap or only Applicable on metal scrap.
Also he not Taking the TDS registration till now , so can now he need to pay TDS from 01.10.2024 to till date (Which he is not deduct) or from TDS registration date when he obtain the same.
THANKS
Nitin Kumar
12 August 2025
1. TDS Applicability on Scrap Purchases
Under GST, Section 51 of CGST Act mandates TDS deduction by specified persons on certain supplies.
Who is required to deduct TDS?
Typically, government departments, local authorities, and certain notified entities are required to deduct TDS under GST. If your client is not a specified person under GST TDS provisions, they are not required to deduct TDS.
TDS Applicability on Scrap
If your client is a specified person under GST TDS provisions and is purchasing scrap, then TDS is applicable on all types of scrap supplies (metal scrap, wood, packing material, plastic, etc.) if the value exceeds Rs. 2.5 lakhs per supplier per annum.
The type of scrap (metal or non-metal) does not matter; all scrap purchases exceeding the threshold attract TDS if buyer is a deductor.
2. TDS Registration
If the client is a specified deductor under GST TDS provisions, he must obtain GST TDS registration before deducting TDS.
Registration is mandatory irrespective of whether supplies are made or not, once the deductor is notified.
3. TDS Deduction from 01.10.2024
If your client was required to deduct TDS from 01.10.2024 (i.e., became a deductor as per the GST TDS notification effective date) but did not deduct TDS, then:
The client is liable to pay the TDS amount from 01.10.2024 onwards even if registration was obtained later.
Late deduction/non-deduction attracts interest and penalty under GST provisions.
The client should immediately obtain TDS registration, start deducting TDS on future payments, and consider voluntary disclosure/rectification for the past period to avoid harsher penalty.
Under GST, Section 51 of CGST Act mandates TDS deduction by specified persons on certain supplies.
Who is required to deduct TDS?
Typically, government departments, local authorities, and certain notified entities are required to deduct TDS under GST. If your client is not a specified person under GST TDS provisions, they are not required to deduct TDS.
TDS Applicability on Scrap
If your client is a specified person under GST TDS provisions and is purchasing scrap, then TDS is applicable on all types of scrap supplies (metal scrap, wood, packing material, plastic, etc.) if the value exceeds Rs. 2.5 lakhs per supplier per annum.
The type of scrap (metal or non-metal) does not matter; all scrap purchases exceeding the threshold attract TDS if buyer is a deductor.
2. TDS Registration
If the client is a specified deductor under GST TDS provisions, he must obtain GST TDS registration before deducting TDS.
Registration is mandatory irrespective of whether supplies are made or not, once the deductor is notified.
3. TDS Deduction from 01.10.2024
If your client was required to deduct TDS from 01.10.2024 (i.e., became a deductor as per the GST TDS notification effective date) but did not deduct TDS, then:
The client is liable to pay the TDS amount from 01.10.2024 onwards even if registration was obtained later.
Late deduction/non-deduction attracts interest and penalty under GST provisions.
The client should immediately obtain TDS registration, start deducting TDS on future payments, and consider voluntary disclosure/rectification for the past period to avoid harsher penalty.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS 194-T applicability
- GST ITC REVERSE
- Fixe term employment
- RCM ISSUE ON RENT AND TRANSPORTATION CHARGES
- Regarding Applicability of Tax Audit u/s 44AB
- Consolidated financials
- Withdrawal in cash from partners capital account by partner
- TDS on Complimentary "Desi Ghee and Gold Coin" Provided to KBC Contestants
- TDS on TRUST
- Section 50-fixed asset-->building ceases to exist
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
