TDS liability under GST notification hinges on statutory control, while the threshold is computed contract-wise, not invoice-wise.

An institution established under the Indian Institutes of Management Act, 2017 was treated as a specified person required to deduct tax at source under section 51 of the CGST Act because the notified wording, read with the statutory framework, covered institutions set up by an Act of Parliament and reflected substantial governmental control through oversight, appointments, audit, reporting and rule-making powers. The Authority also clarified that the Rs. 2,50,000 threshold is computed contract-wise on the aggregate value of supply under each contract, excluding GST, and not invoice-wise; separate contracts are tested independently, while continuous supplies forming part of the same contract are aggregated.

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Issues: (i) Whether an institution established under the Indian Institutes of Management Act, 2017 is a specified person liable to deduct tax at source under section 51 of the Central Goods and Services Tax Act, 2017 read with Notification No. 50/2018-Central Tax dated 13.09.2018. (ii) Whether the threshold of Rs. 2,50,000 for deduction of tax at source is to be determined on the value of supply under each contract, excluding GST, regardless of the number of invoices issued.

Issue (i): Whether an institution established under the Indian Institutes of Management Act, 2017 is a specified person liable to deduct tax at source under section 51 of the Central Goods and Services Tax Act, 2017 read with Notification No. 50/2018-Central Tax dated 13.09.2018.

Analysis: The notification was read in the light of the Supreme Court's interpretation of materially similar language and the Authority held that the disjunctive wording of the notification could not exclude institutions set up by an Act of Parliament from the ambit of the prescribed category. It further examined the statutory framework of the Indian Institutes of Management Act, 2017 and found substantial governmental control through the Visitor's powers, governmental oversight, rule-making authority, accountability requirements, appointment and removal controls, audit and reporting obligations, and the Central Government's regulatory role. On that basis, the Authority concluded that the applicant fell within the notified category for purposes of tax deduction at source.

Conclusion: The issue is answered in the affirmative and against the assessee.

Issue (ii): Whether the threshold of Rs. 2,50,000 for deduction of tax at source is to be determined on the value of supply under each contract, excluding GST, regardless of the number of invoices issued.

Analysis: The Authority held that the contractual arrangement, and not the number of invoices, governs the threshold. Where supplies are made under a single contract, the aggregate value of supply under that contract, excluding GST, is relevant. Where there are separate contracts, each contract is to be tested independently. In continuous or recurrent supply situations forming part of the original contract, the threshold applies to the contract as a whole.

Conclusion: The threshold is to be determined contract-wise and not invoice-wise, with GST excluded from the computation.

Final Conclusion: The ruling confirms liability to deduct tax at source under the notified category and clarifies that the monetary threshold operates by reference to the contract value rather than individual invoices.

Ratio Decidendi: Where statutory language uses disjunctive wording and the surrounding legal framework shows substantive governmental control, the entity may fall within the notified category for tax deduction at source, and the threshold for deduction is computed on the value of the contract and not on individual invoices.

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