Metal scrap transactions subjected to 2% TDS
Updated: Oct 11th, 2024
Transactions on metal scrap will be subjected to tax deducted at source (TDS) of 2% with effect from Thursday, according to a department order.
This provision applies to both parties involved in the scrap metal transaction holding GST registration.
As many traders are yet to obtain GST numbers, it will be difficult for them to comply with the TDS starting Thursday .
If a metal scrap dealer purchasing metal scrap does not have GST registration, he will need to pay 18% GST under the reverse charge mechanism.
According to Chartered Accountant Hem Chajed, the GST paid will be allowed for input tax credit.The inclusion of TDS aims to prevent input tax credit scams through fake bills in the Goods and Services Tax system.
The dealers have sought at least 10 to 20 days for registration to avoid the GST charges.
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