Payments to suppliers of raw material for works under the rural job guarantee scheme MGNREGS in Bihar will henceforth be made only after two per cent TDS (tax deducted at source), in line with recent directions of the ministry of rural development (MoRD) following detection of evasion of goods and service tax (GST) by vendors in Bihar, officials familiar with the matter said.
MGNREGS (Mahatma Gandhi National Rural EMPLOYMENT Guarantee Scheme) is a central scheme that seeks to provide at least 100 days of employment in a year to the unskilled workers in rural areas. All payments against materials supplied and wages go directly into the bank accounts of beneficiaries.
A TDS @2% (1% each of state GST and central GST) is mandatory on payments to suppliers against bills of2.50 lakh and above as per GST rules, but an audit team from the AG office, during a random check in Banka district a few months back, detected that programme officers had not cut any TDS during payments made to suppliers, who provided various materials like , stone chips, bricks and TMT bars for MGNREGS works.