Interpretation of the term “a contract” - TDS applicability ...

GST

June 11, 2021

Interpretation of the term “a contract” - TDS applicability under section 51 of the GST Act - no contract or contract of continuous supply - In the first scenario, since the value of the single invoice is more than ₹ 2.5 lakh, there is no doubt that the tax deduction at source is applicable under section 51 subject to other conditions. In the second scenario, the applicant has clearly stated that the value of supply under a single invoice does not exceed ₹ 2.5 Lakhs and assuming that it is a single transaction as per the purchase order, then tax deduction at source is not applicable on that single transaction or invoice. But if it is a part supply and a part of the continuous supply as per the purchase order, then if the total value of supply as mentioned in the purchase order is more than ₹ 2.5 Lakh, then the provisions of tax deduction at source would become applicable even on this invoice. - AAR

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