IIMs Liable to Deduct GST TDS as Specified Person

Case Details: Indian Institute of Management, In re - [2026] 184 taxmann.com 46 (AAR-GUJARAT)

Judiciary and Counsel Details

Sushma Vora & Vishal Malani, Member
Paritosh Gupta, Adv. Patel Mit Dineshbhai, Asstt. Commissioner for the Applicant.

Facts of the Case

The applicant, an educational institution, registered under GST sought an advance ruling regarding its obligation to deduct Tax Deduction at Source (TDS). It submitted that Section 51 of the CGST Act mandates deduction of tax at source at the rate of 1% where the value of supply under a contract exceeds ₹2.5 lakh. The applicant was seeking clarification regarding the computation of the ₹2.5 lakh threshold for TDS, particularly whether the threshold should apply per contract excluding GST, whether multiple invoices under a single contract would affect the threshold, and how the threshold should be determined where separate contracts with the same supplier or continuous supplies exist. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that Section 51 of the CGST Act read with Notification No. 50/2018-Central Tax, dated 13-09-2018 empowers the Government to notify specified persons liable to deduct TDS and that the wording of the notification clearly includes authorities, boards, or bodies established by an act. It was held that a circular issued by the Department cannot override the interpretation of statutory provisions and is not binding upon quasi-judicial authorities. Accordingly, the applicant was held to be a ‘specified person’ liable to deduct TDS under Section 51 of the CGST Act. It was further clarified that the ₹2.5 lakh threshold for TDS under Section 51 of the CGST Act is determined on the value of each contract excluding GST, separate contracts with the same supplier are assessed independently, while in cases of continuous or recurrent supplies forming part of a single contract, the total contract value determines applicability of TDS.