Section 51

Section 51. Tax deduction at source

Date Issued: 18 September 2017
State: CBIC
Source: CGST Act 2017
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Summary

Section 51 of the CGST Act mandates a Tax Deduction at Source (TDS) mechanism, primarily aimed at government departments and local authorities. When these entities make payments to suppliers for contracts exceeding Rs. 2,50,000, they are legally required to deduct 1% of the payment value as tax and deposit it with the government within 10 days of the following month. The supplier then receives this deducted amount as a credit in their electronic cash ledger to offset their own tax liabilities. To reduce the compliance burden on deductors, a 2021 amendment simplified the TDS certificate rules and officially omitted the daily late fee penalty that was previously charged for delaying the issuance of these certificates to suppliers.