27 Jun 2017 13:32 IST

Govt defers TDS, TCS under GST

Date to be notified later; move aimed at giving industry more time to prepare for new regime

To help industry, especially e-commerce players, prepare for the Goods and Services Tax (GST), the Finance Ministry has deferred the provision for tax deduction and collection at source under the new levy.

It will be started from a date which will be notified separately, said the Ministry on Monday.

Similarly, persons supplying goods or services through an electronic commerce operator and liable to collect tax at source will not be required to register immediately until the tax collection at source (TCS) provision is brought into force.

“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,” said the Ministry.

According to the Central GST (CGST) Act, the notified entities are required to collect TDS at one per cent on payments to suppliers of goods or services in excess of ₹2.5 lakh. GST will be implemented from July 1.

The move will also benefit small businesses with a turnover less than ₹20 lakh that are required to register with the GST portal for selling goods or services through e-commerce portal.

However, all other businesses that have to deduct or collect tax at source will be required to register, but the liability to deduct or collect tax will arise from the date when the respective sections are brought in force, said the Ministry.

Fresh registration

The move comes at a time when the GST common portal has reopened the enrolment window for fresh registrations of first-time taxpayers, including those to be registered as TDS/TCS and enrolment of GST practitioners. It is also open for existing taxpayers to complete their enrolment process.

E-commerce players are also expected to enrol under GST during this time.

The Finance Ministry statement said the decision has been taken to ensure smooth rollout of GST and is based on the feedback of trade and industry.

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