1. GOODS & SERVICES TAX TAX DEDUCTED AT SOURCE
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2. TAX DEDUCTED AT SOURCE Section 51 of the CGST Act
Relevant Rules/Notification yet to be notified.
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3. Rate of TDS and When to collect
On Value of supply under a contract that exceeds Rs. 2,50,000/-.
From payment made or credited to the supplier.
No tax deduction required on IGST supplies.
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4. People/Entities need to deduct TDS:
A department or establishment of the Central or State Govt,
Local authority,
Governmental agencies, or
Persons or category of persons as may be notified, by the Central or a State Govt on Council recommendations.
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5. Value of supply for TDS deduction
Supply Value = Invoice Value – CGST/SGST/IGST.
Therefore TDS shall not be deducted on the CGST, SGST or IGST component of invoice.
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6. TDS when and to whom payable?
To be remitted within 10 days following the month
of deduction.
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7. Further procedural compliances for deductors
Compulsory Registration U/s 23.
Return to be filed GSTR 7 within 10 days of the month of deduction.
The amount deposited as TDS will be reflected in the electronic cash ledger of the supplier/deductee.
TDS certificate to be issued to the deductee within 5 days of deduction
TDS certificate should contain the contract value, rate and amount of deduction, amount paid to the appropriate Govt & such particulars as may be prescribed. Failure would entail penalty of Rs. 100 per day of failure subject to Rs. 5000/-
Non-deduction/ short deduction/ non-payment/ short payment of TDS is on offence under the act for which a minimum penalty of Rs 10000/-
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8. How can the deductee claim benefit of TDS?
TDS amount deducted & reported in GSTR-7 will automatically reflect in electronic cash ledger.
The deductee shall claim credit, in his electronic cash ledger, of the tax deducted and reflected in the return of the deductor in the manner prescribed.
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9. Refund of the excess amount deducted
In case the amount is not claimed by deductee in electronic cash ledger:
Refund to deductor is not possible such case. However, deductee can claim a refund of tax subject to refund provisions of the act. Practically it is not possible to claim any erroneous deduction of TDS by the deductor.
In case the amount is not so claimed by deductee:
Refund of erroneous excess TDS deducted is possible to deductor, subject to refund provision and procedure of the act.
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