Can the TDS liability under GST be fixed with retrospective effect?

[Surender Gupta]

As per Section 51 of THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 Government may mandate the specified category of agencies or persons (as the deductor) who shall be liable to deduct tax @1% on payment made to contractors.

As per Section 1(3) of the Act, Government has power to appoint different dates for different provisions.

Counter provisions (may be termed as replica) to the above provisions appear in the respective state GST acts.  

I failed to find any provision which bestows the government to bring the provisions of the act with retrospect effect. It is difficult to deduct the TDS under the provisions of section 51 where the payment has been made before the provisions came into force.

As per my understanding, no government (be it central or state) is empowered to bring the different provisions of the Central GST Act or State GST Act with retrospective effect in terms of Sub-section (3) of section 1

Central Government has issued notification no. 33/2017 – Central Tax dated 15-9-2017, to bring the provisions of Section 51 (TDS) w.e.f. 18-9-2017. State Government were also expected to work with the same scale and speed. But, it appears that 8 out of (23) states could issue the notification on or before 18-9-2017. 15 states leg much behind.  [we could not get the details from remining states]. Related notifications have been issued in many states with retrospective effect. In the list given below, you may find the latest notification by the State of Uttarakhand which was issued as on 10-11-2017.

We tried to compile the notifications issued by the various governments with this subject and able to get notifications from 23 states. Out of 23 states, only 8 State Governments have issued notification as on 18-9-2017 or before.

If the notifications issued by the State Governments and Central Governments continue to be issued in same scale and speed, i.e. absence of synchronization, both the Government as well as the taxpayers will be looser. Courts will be flooded with the undesired cases and the consultants and legal professional will get more opportunity in the process.

Let us pray that GST Council and the Government may be able to find some solution to overcome the problem.

 

In this background, see the time line:

S.No.	Center/ State	Notifications issued u/s 1(3) read with Section 51(1) of the respective acts.  [State Acts]	Date of the notification	Effective Date	Effect
		By the Center
1.		33/2017 – Central Tax	15-09-2017	18-9-2017
		By the States
1.	ANDHRA PRADESH	G.O.MS. No. 458	16-10-2017	18-9-2017	Retrospective
2.	Bihar	S.O. 181.	21-09-2017	18-9-2017	Retrospective
3.	Chhattisgarh	33/2017-State Tax	15-09-2017	18-9-2017
4.	Delhi	33/2017 - STATE TAX	08-11-2017	18-9-2017	Retrospective
5.	GOA	38/1/2017-Fin(R&C)(16)/2407	21-09-2017	18-9-2017	Retrospective
6.	Gujarat	33/2017-State Tax	15-09-2017	18-9-2017
7.	HARYANA	No: 84/ST-2.	22-09-2017	18-9-2017	Retrospective
8.	Himachal Pradesh	33/2017-State Tax	09-10-2017	18-9-2017	Retrospective
9.	Jharkhand	S.O. No. 90	04-10-2017	18-9-2017	Retrospective
10.	Karnataka	No. FD 47 CSL 2017 - 07/2017	15-09-2017	18-9-2017
11.	Madhya Pradesh	No. FA-3-63/2017-1-V-(104)	18-09-2017	18-9-2017
12.	Maharashtra	33/2017-State Tax	21-09-2017	18-9-2017	Retrospective
13.	Meghalaya	No. ERTS(T) 65/2017/187 (duplicate)  (No. ERTS(T) 65/2017/Pt/026)	09-11-2017  01-11-2017	18-9-2017	Retrospective
14.	Nagaland	No. FIN/REV-3/GST/1/08 (Pt-1)/473	27-09-2017	18-9-2017	Retrospective
15.	Orissa	No. S.R.O. No. 410/2017	16-09-2017	18-9-2017
16.	Puducherry	No. G.O.Ms. No. 35/CT/2017-18	20-09-2017	18-9-2017	Retrospective
17.	Rajasthan	No. F.No.12(46)FD/Tax/2017-Pt-II-88	15-09-2017	18-9-2017
18.	TAMILNADU	No. G.O. Ms. No. 107 - II(2)/CTR/783(c-3)/2017	15-09-2017	18-9-2017
19.	Telangana	No. G.O. Ms. No. 238	26-10-2017	18-9-2017	Retrospective
20.	Tripura	No. F.1-11(91)-TAX/GST/2017(Part-VI)	22-09-2017	18-9-2017	Retrospective
21.	Uttar Pradesh	No. KA.NI.-2-1415/XI-9(15)/17	27-09-2017	18-9-2017	Retrospective
22.	Uttarakhand	No. 919/2017/9(120)/XXVII(8)/2017	10-11-2017	18-9-2017	Retrospective
23.	West Bengal	No. 1665-F.T.	18-09-2017	18-9-2017