By NE NOW NEWS
Guwahati: Concerned over revenue losses linked to tax compliance gaps, the Meghalaya government has directed departments, government-backed bodies and other agencies to strengthen adherence to tax deduction requirements while making payments to contractors and suppliers.
The move follows the detection of multiple cases where government offices were carrying out contractual work and procurement without registering themselves as entities authorised to deduct tax at source.
Officials found that the required deductions were often not being made before payments were released.
Authorities said the lapse created situations where contractors received government funds but failed to deposit the corresponding tax dues, affecting state revenue collection.
In response, all departments, societies and agencies that have not completed the required registration process have been instructed to obtain GST registration at the earliest.
The new directions require a 2 per cent tax deduction on payments related to government contracts and supply orders valued above Rs 2.5 lakh. Details of such deductions must be uploaded through the GSTR-7 return by the 10th day of the next month.
For transactions below the Rs 2.5 lakh threshold, where tax deduction rules do not apply, departments must still provide relevant details to the Office of the Commissioner of Taxes using the prescribed reporting format.
The government has also introduced a condition requiring contractors and suppliers to submit a valid Tax Clearance Certificate (TCC) from the Superintendent of Taxes before they can be considered for any government contract.
The document will serve as evidence that previous tax liabilities have been cleared.
The order makes it clear that officials may be held answerable for financial losses caused by non-compliance with these instructions.