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Brief note on Tax Deducted at Source (TDS) under GST rule
1. Following entities are liable to deduct TDS on payments made to the supplier of taxable goods or services:
- Government Departments/Agencies
- Local authority; such as Municipality etc.
- An authority set up by Parliament or a State Legislature or by a government, with 51% equity ( control) owned by the government.
- A society established by the Government
- Public sector undertakings ( PSU)
2. The TDS is deducted if the individual contract value ( Purchase Order ) is more than 2.5 lakh.
2. Rate of TDS is 2% of invoice value excluding CGST, SGST & IGST.
3. Procedure of deduction TDS and claiming the same by supplier :-
- Customer shall deduct the TDS and deposit it with the Government by 10th day of the following month
- Customer shall file TDS return in Form -7 by 10th day of the following month
- Customer shall provide a certificate in form GSTR – 7A by 15th day of the following month
- The above TDS will reflect in Supplier’ Credit Account on Goods and Service Tax portal.
- Supplier of Goods and Service shall claim the tax at the time of filing the return.
4. The above rule is effective from 1st October, 2018.
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But this TDS amount neither shows in electronic cash ledger nor in electric credit ledger. Then How A Tax payer can take benefit of this TDS amount by lowering his cash payment towards his GST Tax Payment. Explain…