TDS under GST

Tax Deducted at Source under GST Act

1. TDS under gst act Suresh Gajari

2. Scope / objective Who are liable to deduct TDS under GST When will the liability to deduct TDS be attracted Nature of TDS & Its Rate How to calculate TDS TDS Registration Due date for payment of TDS to Govt Refund of TDS to deductee

3. Who are liable to deduct tds under gst As per section 51(1) of CGST Act,2017, The following persons are liable to deduct TDS under GST Act, A department or establishment of the central govt or state govt ; or Local authority; or Government agencies; or Such persons or category of persons as may be notified by the government. (Notification on 13 th Sep 2018) An authority or a board or any other body which has been set up by parliament or a state legislature or by a government, with 51% equity owned by the government. A society established by the central or any state government or a local authority and the society is registered under the Societies Registration act, 1860. Public Sector Undertakings

4. When will the liability to deduct TDS be attracted The deductor is liable to deduct tax, where the total value of taxable supply, under a contract, exceeds Rs.2,50,000/-. For the above purpose, value of supply excludes Central tax, State tax, UT tax, Integrated tax & Cess . Under a contract, Taxable supply – 2,00,000 and Exempted supply – 1,00,000 In this situation the person is not liable to deduct because value of taxable supply is not exceeding Rs. 2,50,000/-.

5. Nature of tds & its rate Name of Supply Name of TDS Rate of Tax Location of the supplier & Place of supply is in the same state / UT without any legislature. CGST 1% SGST 1% Location of the supplier & Place of supply is in the different states. IGST 2%

6. How to calculate tds amount Invoice value = 3,54,000 (Inclusive of GST @ 18%) Invoice value (Excluding GST) = 3,54,000*100/118 = 3,00,000 IGST = 54,000 TDS under GST= 3,00,000 * 2% = 6,000 (2% on payment made to supplier not on GST Amount) Deductee can claim refund of Rs.6,000. Deductor can claim ITC of Rs. 54,000.

7. Registration A person who is liable to deduct TDS has to compulsorily register whether or not seperately registered under this act and there is no threshold limit for this. (Section 24(2)) The registration under GST can be obtained without PAN and by using the existing TAN issued under the income tax act. TAN is mandatory.

8. Due date for Payment of tds The amount deducted tax under this act shall be paid to the government by the deductor within 10 Days from the end of the month in which such deduction made. (Section 51(2)). Due date for filing return i.e., GSTR 7 is 10 th of every next month in a particular tax period. If the deductor fails to pay with in due date, he shall pay interest @ 18% in accordance with 50(1) of CGST Act.

9. Tds certificate The deductor shall furnish TDS certificate to the Deductee within 5Days of crediting the amount so deducted to the government . (Section 51(3) & (4)) Example: Actual transaction date: 03/10/2018 TDS deducted: 03/10/2018 TDS paid to govt on: 07/11/2018 (Due date – 10/11/2018) Then TDS Certificate shall furnish within 12/11/2018.

10. Refund of tds to deductee The deductee shall claim credit, in his credit ledger, of the tax deducted and reflected in the return of the deductor furnished under section 39(3). The deductor can clain ITC of total GST amount.