CA Bharat Mathur
1. Department or establishment of the Central govt. or State govt.
A department is composed of employed officials, known as civil servants, and is politically accountable through a minister.
For instance: –
- Ministry of Agriculture
- Ministry of Chemicals and Fertilizers
- Ministry of Civil Aviation
- Ministry of Coal
- Ministry of Commerce and Industry
- Ministry of Communications and Information Technology
- Ministry of Consumer Affairs, Food and Public Distribution
- Ministry of Corporate Affairs
2. Local authority
Local authority shall mean a municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the Government with the control or management of a municipal or local fund.
3. Government agencies
A government agency is a permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions. The govt. agencies generally function within the purview of a specific govt. department.
For eg: – National Investigation Agency, Intelligence Agency, etc.
4. An authority or a board or any other body, –
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government,
with fifty-one percent or more participation by way of equity or control, to carry out any function
5. Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860
6. Public sector undertakings
DEDUCTEE
A supplier of goods or services or both to any person or class of persons falling under the category of “deductor”.
LIABILITY TO DEDUCT TAX
At the time of payment to the supplier OR crediting the amount to the account of the supplier, whichever is earlier.
RATE OF TDS
For Intra – state supplies: – 2% (1% CGST + 1% SGST)
For inter – state supplies: – 2% (IGST)
Tax should be deducted on the value of supply, excluding the GST component involved.
THRESHOLD VALUE FOR TAX DEDUCTIONS
Contract value exceeding Rs. 2,50,000
It should be noted that unlike the Income tax provisions wherein the threshold criteria for Tax Deduction at Source is based upon the total monetary value of transactions undertaken during the financial year, the GST provisions provide for tax deductions only if the value of a contract / agreement / order exceeds Rs. 2.50 lakhs.
NON APPLICABILITY OF TDS
Tax shall not be deducted if the location of the supplier and the place of supply is in a State which is different from the State of registration of the recipient.
UNDERSTANDING THE APPLICABILITY OF TDS
| SUPPLIER | PLACE OF SUPPLY | RECIPIENT | TDS APPLICABLE |
CATEGORY & RATE |
| Gujarat | Gujarat | Gujarat | Yes | 2 % (CGST + SGST) |
| Gujarat | Gujarat | Maharashtra | No | – |
| Gujarat | Maharashtra | Maharashtra | Yes | 2% (IGST) |
OTHER PROCEDURAL ASPECTS
1.Monthly TDS return to be filed by the deductor in Form GSTR 07 on or before the 10th of the following month.
2. TDS amount to be deposited by the 10th of the following month, failure to which attracts interest @ 18% p.a.
3. Supplier to claim the credit of such TDS value in its electronic cash ledger.
4. A tax deduction certificate should be provided by the deductor to the deductee within 5 days of depositing the TDS amount to the government.
5. No Tax deductions are required in case of receipt of supplies from unregistered persons.
(The author of the article, Bharat Mathur, is a practicing Chartered Accountant and can be reached at [email protected])
