Govt defers TDS, TCS provisions under GST

Tribune News Service

New Delhi, June 26

The government today deferred implementation of tax deduction at source (TDS) and tax collection at source (TCS) provisions besides exempting from registration small businesses supplying and selling on e-commerce platforms.

E-commerce companies will not be required to collect 1 per cent TCS while making payment to suppliers under the Goods and Services Tax (GST) which will be rolled out from July 1.

As per the Central GST (CGST) Act, the notified entities are required to collect TDS at 1 per cent on payments to suppliers of goods or services in excess of Rs 2.5 lakh. The provision has been kept in abeyance.

The Finance Ministry said in a statement that based on the feedback received from trade and industry, the government has decided to postpone provisions relating to TDS (Section 51) and TCS (Section 52) of the CGST/State GST Act 2017, with the objective of ensuring a smooth rollout of GST.

Small businesses, with turnover less than Rs 20 lakh, will also not be required to get registered under the GST for selling goods or services through e-commerce portals.

In other words, persons supplying goods or services through electronic commerce operator liable to collect tax at source would not be required to obtain registration immediately, the statement said.

“The step has been taken to provide more time to persons liable to deduct tax at source/e-commerce companies and their suppliers to prepare for the historic tax reform,” the statement added.