Latest Query & Reply

Whether GST TDS is required to be deducted by principle contractor of sub-contractor in case of Government contract where contract fully sub contracted.

Government department has deducted GST TDS of Principle contractor whether principle contractor should deduct GST TDS of Subcontractor?

Reply

Persons who are required to deduct the TDS under GST

As per section 51 following category of person would have 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.

1. A department or establishment of the Central Government or State Government; or-Sec-51(1)(a)
2. Local authority; or- Sec-51(1)(b)
3. Governmental agencies;- Sec-51(1)(c)
4. Such persons or category of persons as may be notified by the Government- Sec-51(1)(d)- Notification No -50/2018

a. An authority or a board or any other body, -

  • set up by an Act of Parliament or a State Legislature; or
  • established by any Government,

with fifty-one percent 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.

Therefore, the principal contractor is not required to deduct TDS under GST unless he falls in any of the above category.