The Goods and Services Tax Network ( GSTN ), vide its advisory issued on October 13, 2024 has notified to enable the registration facility in the GST portal for Tax Deduction at Source ( TDS ) under Section 51 of the GST Act for the scrap dealers.
The GSTN issued the following:
“The government has issued Notification 25/2024-Central Tax, on October 9, 2024.under GST Section 51 of the CGST Act, 2017 mandating compliance by the businesses dealing with Metal Scrap. The GST portal will soon be updated to enable compliance of registration through FORM GST REG-07 by these category of registered persons.”
The 54th GST (Goods and Services Tax) Council meeting, held on September 9, 2024, recommended a 2% TDS on the supply of metal scrap in business-to-business (B2B) transactions involving registered persons. Additionally, the meeting provided clarifications on the Reverse Charge Mechanism (RCM). The session was chaired by Finance Minister Nirmala Sitharaman.
On October 8, 2024, the Central Government implemented the Reverse Charge Mechanism (RCM) for metal scrap through Notification No. 06/2024-Central Tax (Rate), amending the foundational Notification 4/2017-Central Tax (Rate) dated June 28, 2017, effective from October 10, 2024.
Following this, Notification 25/2024-Central Tax was issued on October 9, 2024, to execute the GST Council’s second recommendation regarding TDS on business-to-business (B2B) transactions involving metal scrap.
This new notification, under Section 1(3) in conjunction with Section 51 of the CGST Act, adds clause (d) to the foundational Notification 50/2018 dated September 13, 2018, designating registered recipients of metal scrap supplies—classified under chapters 72 to 81 of the CTH—as responsible for deducting tax at source.
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