The Central Government vide Notification No. 50/2018 – Central Tax dated September 13, 2018, has appointed the 1st day of October, 2018, as the date on which the provisions of Section 51 of the CGST Act, 2017 (i.e. Tax deduction at source) shall come into force.
In terms of Section 51 of the CGST Act, 2017, the Government may mandate,––
a. A department or establishment of the Central Government or State Government; or
b. Local authority; or
c. Governmental agencies; or
d. Such persons or category of persons as may be notified by the Government on the recommendations of the Council
to deduct tax at the rate of one per cent. from the payment made or credited to the supplier of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees.
Vide the above mentioned notification, TDS provision has been made applicable with respect to persons specified under clauses (a), (b) and (c) of Section 51(1) and the persons specified below under clause (d) thereof, namely:
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 per cent. 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
The Notification can be accessed at: Notification No. 50/2018 – Central Tax