New concept in GST: TDS

New concept in GST: TDS




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New concept in GST: TDS

According to Notification No. 50/2018 – Central Tax of 13th September, 2018 TDS provisions under GST (Section 51) shall be applicable from 1st October, 2018.

 

TDS refers to the tax which is deducted when the recipient of goods or services makes some payments under a contract etc.

PERSON LIABLE TO DEDUCT TDS

  1. A department or establishment of the Central Government or State Government
  2. Local Authority
  3. Governmental Agencies
  4. Such person or category of persons as may be notified by the Government on the recommendation of the Council.

Following entities as notified by the Government on 13th September 2018 shall be liable to deduct TDS –

  1. An Authority or Board or any other body which has been set up by Parliament or a State Legislature or by a Government, with 51% equity (control) owned by the Government.
  2. 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.
  3. Public Sector Undertaking

REGISTRATION

Person liable to deduct TDS as per the provisions of section 51 of CGST Act, 2017. Threshold exemption limit is not applicable to such persons.

PAN is not mandatory for obtaining GST registration, however registration can be obtained on the basis of existing Tax deduction and Collection Account Number (TAN).

 

TDS RATE UNDER GST

TDS is to be deducted at the rate of 2% on payments made to the supplier of taxable goods and or services, where the total value of such supply under an individual contract, exceeds Rs. 2,50,000. No deduction is required when the location of supplier and place of supply is different from State of the registration of the recipient.

 PAYMENT OF GST TDS

The deductor of TDS is required to deposit the amount so deducted to the Government by the 10th of the succeeding month in which tax is deducted.

GST TDS RETURN FILING

The person deducting TDS is liable to file return in FORM GST 7 within a period of 10 days from the end of the month.

GST TDS REFUND

When TDS has been erroneously or has been deducted in excess of the amount actually to be deducted, such excess or erroneous TDS can be claimed as refund. If excess amount so deducted is already credited to electronic cash ledger of the deductee then no refund is available.

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