Advisory for Reporting TDS Deducted by Scrap Dealers in October 2024

1. Notification Applicability

• Reference: Notification No. 25/2024-Central Tax.
• Effective Date: October 10, 2024.
• Requirement:
  • Any registered person receiving metal scrap supplies (Chapters 72 to 81 of the Customs Tariff Act, 1975) from another registered person must deduct TDS under Section 51 of the CGST Act, 2017.

2. Issue with October 2024 TDS Reporting

• Problem Identified:
  • Taxpayers faced challenges reporting TDS deducted in October 2024 due to delayed GST registration approvals in November 2024.
  • The GSTN system does not allow filing returns for periods prior to the registration approval month.

3. Resolution Mechanism

• Guidance for Affected Taxpayers:
  • Taxpayers registered in November 2024 but who deducted TDS during October 2024 (10.10.2024 to 31.10.2024) should report the consolidated TDS amount for the period 10.10.2024 to 30.11.2024 in the GSTR-7 return for November 2024.
• Purpose:
  • To comply with TDS reporting requirements despite GSTN system limitations.
  • To simplify the filing process for affected taxpayers.

4. Key Takeaways

• Ensure compliance with TDS obligations under Section 51 of the CGST Act.
• Utilize the November 2024 return to account for October 2024 TDS deductions.
• Follow the advisory to avoid penalties or discrepancies in TDS reporting.