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CS Executive · Tax Laws and Practice · Basics of Goods and Services Tax

Under the proviso to the IGST provision applying CGST law to integrated tax, at what rate does a deductor deduct tax at source from the payment made or credited to the supplier?

The deductor deducts tax at source at two per cent from the payment made or credited to the supplier, as stated in the proviso to section 20 of the IGST Act. The one per cent rate is a distractor and does not apply to integrated tax.

  1. AOne per cent
  2. BTwo per centCorrect
  3. CHalf per cent
  4. DFive per cent

Explanation

The first proviso to section 20 of the IGST Act states that, for tax deducted at source, the deductor shall deduct tax at the rate of two per cent from the payment made or credited to the supplier. One per cent is the rate commonly associated with the CGST and SGST components separately, so it is not the answer for integrated tax.

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