An entity established by govt. notification is liable to deduct TDS u/s 51
Shanti Prime Publication Pvt. Ltd.
TDS under GST — In the instant case, applicant argues that applicant cannot be termed as Public sector undertaking and it is not liable to deduct TDS.
Held that—The Applicant was incorporated as a limited company on 25/03/1988 after reconstitution of the erstwhile West Bengal Filaments and Lamp Ltd. From the available materials it appears that neither the Central Government nor the State Government has any direct equity participation. But the “Government Companies”, as defined under section 2(45) of the Companies Act, 2013, together hold 62.29% of the paid up share capital and majority of the directors in the Board. WBIDC alone holds 49.46% of the shares, and enjoys four votes (including the casting vote of the Chairman) in a nine member Board. The Central and the State Governments, therefore, acting through the government companies, are in a position to indirectly control the management or policy decisions of the Applicant. The Central and the State Governments, therefore, “control” the Applicant within the meaning of Section 2(27) of the Companies Act, 2013.
Clause a (ii) of the Notification is, therefore, applicable for the Applicant if he is established by government notification.
Ruling— The Applicant, if established by government notification, is liable to deduct tax at source under section 51(1) read with Notification No. 1344-FT dated 13/09/2018, being a company controlled by the Central and the State Governments. — WEBFIL Ltd., In Re.. [2019] 8 TAXLOK.COM 005 (AAR-WB)
An entity established by govt. notification is liable to deduct TDS u/s 51
Shanti Prime Publication Pvt. Ltd.
TDS under GST — In the instant case, applicant argues that applicant cannot be termed as Public sector undertaking and it is not liable to deduct TDS.
Held that—The Applicant was incorporated as a limited company on 25/03/1988 after reconstitution of the erstwhile West Bengal Filaments and Lamp Ltd. From the available materials it appears that neither the Central Government nor the State Government has any direct equity participation. But the “Government Companies”, as defined under section 2(45) of the Companies Act, 2013, together hold 62.29% of the paid up share capital and majority of the directors in the Board. WBIDC alone holds 49.46% of the shares, and enjoys four votes (including the casting vote of the Chairman) in a nine member Board. The Central and the State Governments, therefore, acting through the government companies, are in a position to indirectly control the management or policy decisions of the Applicant. The Central and the State Governments, therefore, “control” the Applicant within the meaning of Section 2(27) of the Companies Act, 2013.
Clause a (ii) of the Notification is, therefore, applicable for the Applicant if he is established by government notification.
Ruling— The Applicant, if established by government notification, is liable to deduct tax at source under section 51(1) read with Notification No. 1344-FT dated 13/09/2018, being a company controlled by the Central and the State Governments. — WEBFIL Ltd., In Re.. [2019] 8 TAXLOK.COM 005 (AAR-WB)
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