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Under Section 51 of the CGST Act, above what contract value is a notified government deductor ordinarily required to deduct GST at source, assuming other conditions are met?

Question and options

Under Section 51 of the CGST Act, above what contract value is a notified government deductor ordinarily required to deduct GST at source, assuming other conditions are met?
  1. ₹5 lakh exclusive of tax

  2. ₹10 lakh inclusive of tax

  3. ₹2.5 lakh exclusive of tax

  4. ₹2.5 lakh inclusive of tax

Answer and explanation

Correct answer: C - ₹2.5 lakh exclusive of tax

Under section 51(1) of the CGST Act, a notified deductor deducts tax at source where the total value of supply under a contract exceeds ₹2,50,000, and the explanation excludes central, State, Union territory and integrated tax and cess shown in the invoice from that value. A figure inclusive of tax is therefore not the test.

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