On October 13, 2024, the Goods and Services Tax Network ( GSTN ), vide its advisory issued, notified to allow the registration utility in the GST portal for Tax Deduction at Source ( TDS ) u/s 51 of the GST Act for the scrap dealers.
GST Notification 25/2024-Central Tax
“The government has issued Notification 25/2024-Central Tax, on October 9, 2024. under GST Section 51 of the CGST Act, 2017 mandating compliance by the businesses dealing with Metal Scrap. The GST portal will soon be updated to enable compliance of registration through form GST REG-07 by these category of registered persons.”
On September 9, 2024, the 54th GST (Goods and Services Tax) Council meeting, has been conducted that suggested a 2% TDS on the supply of metal scrap in business-to-business (B2B) transactions implicating registered persons. Also, the meeting furnished clarifications on the Reverse Charge Mechanism (RCM). Finance Minister Nirmala Sitharaman chaired the session.
The Central Government on October 8, 2024, executed the Reverse Charge Mechanism (RCM) for metal scrap via Notification No. 06/2024-Central Tax (Rate), amending the foundational Notification 4/2017-Central Tax (Rate) dated June 28, 2017, effective from October 10, 2024.
After this, for the TDS on business-to-business (B2B) transactions involving metal scrap, Notification 25/2024-Central Tax was issued on October 9, 2024, to implement the GST Council’s second recommendation.
U/s 1(3) in conjunction with Section 51 of the CGST Act, this new notification, adds clause (d) to the foundational Notification 50/2018 on September 13, 2018, setting registered recipients of metal scrap supplies—categorized under chapters 72 to 81 of the CTH as liable for deducting tax at source.
