Page 16 - Ch9_POT & TDS-TCS

TDS-TCS

11. Sec 51: Tax deducted at source
CCP 09.11.21.00
Answer the following questions:
1) Who is liable to deduct tax at source?

2) Whether person liable to deduct tax, even though if the supplier has charged GST in his invoice?
3) What is the threshold limit for tax deduction at source?
4) State the cases where provisions of TDS are not applicable.
Answer :-

1) The CG or SG may mandate the following person to deduct tax at source:
a) A department or establishment of the Central or State Government or
b) Local authority or
c) Governmental agencies or

d) Persons notified by Government on recommendations of Council as follows:
(i) an authority/ board/ any other body,
- set up by an Act of Parliament or a State legislature or
- established by any Government,

with 51% or more participation by way of equity or control, to carry out any function
(ii) Society established by CG/SG/ Local Authority under Societies Registration Act, 1860.
(iii) Public Sector Undertakings (PSUs).
2) Ü Yes, the taxable person shall deduct the tax irrespective of whether GST is charged in the

invoice or not.
Ü For the purpose of deduction of tax value of supply shall be taken as the amount excluding CGST,
SGST, UTGST, IGST and Cess indicated in the invoice.
3) Ü The threshold limit for tax deduction at source is ₹ 2.5 Lakh.

Ü For the purpose of computation of threshold limit, Contract value needs to be considered and
not the invoice value or payment amount.
Ü However, for the purpose of ascertaining the threshold limit, the value of supply shall be
considered as the amount excluding taxes.

4) Non Applicability of TDS Provision under certain cases as under:-
a. Total Value of Taxable supply <=250000 under a contract.
b. Contract involves supply of both taxable & exempted goods, but the value of Taxable supply in the
contract <=250000.

c. Supply of goods &/or services from a PSU to another PSU, whether or not a distinct person.
d. Supply of goods &/or services between one person to another person specified u/s 51(1).
e. Tax is to be paid under RCM by recipient i.e. deductee.
f. Payment is made to unregistered supplier.

g. Payment relates to the Cess component.
h. All activities specified in schedule III, irrespective of value.

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