Ahead of GST rollout, govt postpones implementation of TDS, TCS

Ahead of the Goods and Services Tax (GST) rollout on July 1, the government on Monday deferred implementation of provisions pertaining to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS).

According to a finance ministry statement on Monday afternoon, small businesses with turnover less than Rs 20 lakh, selling on e-commerce platforms would be exempted from registration for TCS and e-commerce companies will not be required to collect one per cent TCS while making payment to suppliers under the GST.

This has been done to provide more time to those liable for deduction of tax at source and e-commerce companies and their suppliers to prepare for the tax reform. The exemption will be in force till a final decision is arrived at on when the provisions can be implemented.

The statement said that small businesses on e-commerce platforms would not be liable to register immediately till the provision of TCS is brought into force.

The finance ministry said that the postponement was arrived at with the objective of ensuring the smooth rollout of GST and taking into account the feedback received from trade and industry regarding provisions of TDS under Section 51 of the CGST / SGST Act 2017 and TCS under Section 52 of the CGST / SGST Act 2017.

"... persons supplying goods or services through electronic commerce operator liable to collect tax at source would not be required to obtain registration immediately, unless they are so liable under Section 22 or any other category specified under Section 24 of the CGST / SGST Act, 2017," the finance ministry note said.

The move comes at a time when the GST Network 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.