Understanding the TDS Advisory for Scrap Dealers
In line with Notification No. 25/2024-Central Tax, effective from 10th October 2024, taxpayers receiving supplies of metal scrap under Chapters 72 to 81 of the Customs Tariff Act, 1975, must deduct TDS under Section 51 of the CGST Act, 2017. However, a practical challenge arose in reporting TDS for October 2024 due to GST registration delays. Here’s a simplified guide to help you navigate this issue, TDS reporting for scrap dealers.
The Problem: Registration Delays Affecting Return Filing
Many taxpayers who applied for GST registration in October 2024, as required under the new notification, received their registrations only in November 2024. Due to the GSTN system’s design, these taxpayers couldn’t file returns for October 2024 since returns for periods before the registration month are disabled.
The Solution: Reporting TDS in November’s GSTR-7
To address this, the government has issued clear guidance:
- Taxpayers who deducted TDS from 10th October 2024 to 30th November 2024 should report the consolidated TDS amount in the GSTR-7 return for November 2024.
- This approach ensures compliance without complicating system limitations.
Simplified Steps for Compliance
| Step | Action |
|---|---|
| 1. GST Registration | If you received metal scrap supplies in October 2024, apply for GST registration in that month. |
| 2. TDS Deduction | Deduct TDS on eligible supplies under Section 51 of the CGST Act, 2017. |
| 3. Issue Encountered | If GST registration is approved in November 2024, you won’t see October 2024 in the return dropdown. |
| 4. Solution | Report TDS deducted from 10.10.2024 to 30.11.2024 in the November 2024 GSTR-7 return. |
| 5. File GSTR-7 | Include consolidated TDS details for both months in your November return. |
FAQ
Q: My GST registration was granted in November 2024. How do I report TDS for October?
A: Report the TDS for both October and November in the GSTR-7 return for November 2024.
Q: Can I file October’s TDS separately?
A: No, as per the GSTN system design, you must consolidate and file in November’s return.
Q: Will this affect my compliance status?
A: No, this ensures accurate reporting and aligns with government directives.
Conclusion
This advisory simplifies compliance with the TDS reporting requirements for scrap dealers under the CGST Act. By consolidating TDS for October and November 2024, taxpayers can avoid complications due to registration delays and maintain compliance seamlessly.