Assam Amends GST Notification to Broaden Tax Deduction at Source Provisions for Metal Scrap

The Government of Assam, through its Finance (Taxation) Department, issued a Notification-State Tax, eCF No.151446/334, on October 17, 2025, to amend an earlier notification concerning the Assam Goods and Services Tax (GST) Act, 2017. This legislative instrument, published in the Assam Gazette, Extraordinary, modifies notification No. FTX.56/2017/326, originally dated October 9, 2018. The amendment was made in exercise of the powers conferred by sub-section (3) of section 1 read with section 51 of the Assam Goods and Services Tax Act, 2017 (Assam Act No. XXVIII of 2017), following recommendations from the Council. The primary effect of this amendment is to expand the scope of Tax Deduction at Source (TDS) provisions under the state's GST framework, specifically targeting transactions involving metal scrap. This notification introduces new obligations for registered persons engaged in the supply chain of such goods. The changes introduced by this notification are deemed to have come into force retrospectively from October 8, 2024.

The legislative intent behind this amendment is to enhance tax compliance and streamline revenue collection within the metal scrap industry by bringing specific transactions under the ambit of Tax Deduction at Source (TDS). Prior to this amendment, the existing statutory framework, as outlined in the 2018 notification, did not explicitly cover certain supplies of metal scrap under the TDS mechanism, potentially leading to gaps in tax collection. The current notification addresses this by inserting a new clause (d) after clause (c) and before the first proviso in the original notification. The legislation provided: “(d) any registered person receiving supplies of metal scrap falling under Chapters 72 to 81 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), from other registered person:” This new clause mandates that any registered person (a business or individual registered under GST) who receives supplies of metal scrap, specifically those classified under Chapters 72 to 81 of the First Schedule to the Customs Tariff Act, 1975, from another registered person, will be subject to TDS. Furthermore, the notification substitutes the third proviso of the original notification, clarifying the applicability of exemptions. The new proviso states that the notification's provisions shall not apply to supplies of goods or services or both between persons specified under clauses (a), (b), (c), and (d) of sub-section (1) of Section 51 of the said Act, with the explicit exception of the person referred to in the newly inserted clause (d) of this notification. This modification aims to ensure that while certain inter-entity transactions remain outside the TDS purview, the newly included metal scrap transactions are unequivocally covered. The amendment thus introduces a new obligation for registered persons involved in the metal scrap trade, requiring them to deduct tax at source on specified inward supplies, thereby strengthening the enforcement mechanisms for GST collection in this sector.

Keywords: Assam GST, Tax Deduction at Source, Metal Scrap, GST Notification, Finance Taxation Department, Statutory Amendment, Tax Compliance, Goods and Services Tax Geo Tags: India, Assam District: Not Applicable