A. GST TDS provisions put into action w.e.f. 01-10-2018 by Notification 50/2018-Central Tax dated 13-9-2018

1. Persons Liable to Deduct tax

Following persons shall be liable to deduct TDS @ 2% (1% CGST and 1% SGST or 2% for IGST) :

a) a department or establishment of the Central Government or State Government

b) Local Authority

c) Governmental Agencies

d) 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 per cent. or more participation by way of equity or control, to carry out any function

e) Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860);

f) Public sector undertakings.

2. Time of TDS Deduction

Tax to be deducted at the time of payment or credit to the supplier of taxable goods or services

3. Thresh hold for TDS Deduction

Tax to deducted only if total value of supply under the contract exceeds Rs. 2,50,000/-

4. No deduction in certain cases

No deduction shall be made if the location of supplier and place of supply is in state which is different from state or union territory of registration of recipient.

(a) Supplier, place of supply and recipient are in the same state. It would be intra-State supply and TDS (Central plus State tax) shall be deducted. It would be possible for the supplier (i.e. the deductee) to take credit of TDS in his electronic cash ledger.

(b) Supplier as well as the place of supply are in different states. In such cases, Integrated tax would be levied. TDS to be deducted would be TDS (Integrated tax) and it would be possible for the supplier (i.e. the deductee) to take credit of TDS in his electronic cash ledger.

(c) Supplier as well as the place of supply are in State A and the recipient is located in State B. The supply would be intra-State supply and Central tax and State tax would be levied. In such case, transfer of TDS (Central tax + State tax of State B) to the cash ledger of the supplier (Central tax + State tax of State A) would be difficult. So in such cases, TDS would not be deducted.

[Extracted from E Version on TDS Mechanism under GST dated 21-06-2017]

5. Registration:

A TDS deductor has to compulsorily register without any threshold limit. The deductor has a privilege of obtaining registration under GST without requiring PAN. He can obtain registration using his Tax Deduction and Collection Account Number (TAN) issued under the Income Tax Act, 1961.

[Extracted from E Version on TDS Mechanism under GST dated 21-06-2017]

Application for Registration to be filed in REG-07. Registration certificate to be issued in REG-06. If proper officer is satisfied that a person no longer liable to deduct tax, he may cancel registration in REG-08.

6. Deposit of TDS with the Government:

The amount of tax deducted at source should be deposited to the Government account by the deductor by 10th of the succeeding month. The deductor would be liable to pay interest if the tax deducted is not deposited within the prescribed time limit. [Extracted from E Version on TDS Mechanism under GST dated 21-06-2017]

7. Return

Return to be furnished in GSTR-7. The details of deduction shall also be available to supplier in GSTR2 A/4A. No Annual return is required to be furnished by deductor.

8. TDS Certificate

A TDS certificate is required to be issued by deductor (the person who is deducting tax) in Form GSTR-7A to the deductee (the supplier from whose payment TDS is deducted), within 5 days of crediting the amount to the Government, failing which the deductor would be liable to pay a late fee of Rs. 100/- per day from the expiry of the 5th day till the certificate is issued. This late fee would not be more than Rs. 5000/-. For the purpose of deduction of tax specified above, the value of supply shall be taken as the amount excluding the Central tax, State tax, Union territory tax, Integrated tax and cess indicated in the invoice.

For instance, suppose a supplier makes a supply worth Rs. 1000/- to a recipient and the GST @ rate of 18% is required to be paid. The recipient, while making the payment of Rs. 1000/- to the supplier, shall deduct 1% viz Rs. 10/- as TDS. The value for TDS purpose shall not include 18% GST. The TDS, so deducted, shall be deposited in the account of Government by 10th of the succeeding month. The TDS so deposited in the Government account shall be reflected in the electronic cash ledger of the supplier (i.e. deductee) who would be able to use the same for payment of tax or any other amount. [Extracted from E Version on TDS Mechanism under GST dated 21-06-2017]

Read More about TDS on GST Notification here

B. GST TCS provisions put into action w.e.f. 01-10-2018 by Notification 51/2018-Central Tax dated 13-9-2018

1. Maximum TCS rate is 2%. Precise rate not yet notified

2. Electronic Commerce operator other than aggregators u/s 9(5) are required to collect TCS

3. TCS to be deducted on net aggregate value of taxable supplies during the month reduced by returns during the month

4. Registration to be applied in REG-07. Registration certificate to be granted in REG-06. If proper officer is satisfied that a person is no longer liable to deduct tax, he may cancel registration by REG-08

5. Amount to be deposited with 10 days from end of month.

3. Return to be filed in GSTR-8. Annual return to be filed in form GSTR-9B

7. Details filed in GSTR-8 shall be available to supplier in 2A.

C. Reconciliation Statement 9C to be provided where turnover exceeds Rs. 2 crores [Notification 49/2018-Central Tax dated 13-09-2018]

1. Summary of 9C

Part A Reconciliation Statement
Part B Certification

I. Certification in cases where the reconciliation statement (FORM GSTR-9C) is drawn up by the person who had conducted the audit

II. Certification in cases where the reconciliation statement (FORM GSTR-9C) is drawn up by a person other than the person who had conducted the audit of the accounts

2. Part A of reconciliation Statement has following parts

Part I Basic Details
Part II Reconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (GSTR9)
Part III Reconciliation of tax paid
Part IV Reconciliation of Input Tax Credit (ITC)
Part V Auditor’s recommendation on additional Liability due to non-reconciliation

3. Part II: Reconciliation of turnover declared in audited Annual Financial Statement with turnover declared in Annual Return (GSTR9)

5 Reconciliation of Gross Turnover
6 Reasons for Un – Reconciled difference in Annual Gross Turnover
7 Reconciliation of Taxable Turnover
8 Reasons for Un – Reconciled difference in taxable turnover

4. Part III : Reconciliation of Tax Paid

9 Reconciliation of Rate wise liability and amount payable
10 Reasons for Un reconciled payment of amount
11 Additional amount payable but not paid

5. Part IV: Reconciliation of ITC

12 Reconciliation of Net ITC with annual return
13 Reasons for unreconciled difference in ITC
14 Reconciliation of ITC declared in GSTR 9 with ITC availed on expenses as per Annual audited Financial statements
15 Reasons for Unreconciled Differences in ITC
16 Tax Payable on Unreconciled Differences in ITC

6. Part V: Auditor’s recommendation on additional Liability due to non-reconciliation

7. GSTR-9C : Important Fields

5 Reconciliation of Gross Turnover Observations
5A Turnover (including exports) as per audited financial statements for the State / UT (For multi-GSTIN units under same PAN the turnover shall be derived from the audited Annual Financial Statement) Turnover as per Annual Audited Financial Statements. In case of registration in Multiple states, GSTIN wise turnover to be internally derived.
Add:
5B Unbilled revenue at the beginning of Financial Year Revenue recognised in accounts last year but billed in current year (e.g. due to payment not received/30 Days time for services)
5C Unadjusted advances at the end of the Financial Year
5D Deemed Supply under Schedule I
5E Credit Notes issued after the end of the financial year but reflected in the annual return
5F Trade Discounts accounted for in the audited Annual Financial Statement but are not permissible under GST Trade discounts which are accounted for in the audited Annual Financial Statement but on which GST was leviable(being not permissible) shall be declared here.
Less:
5G Turnover from April 2017 to June 2017
5H Unbilled revenue at the end of Financial Year
5I Unadjusted Advances at the beginning of the Financial Year
5J Credit notes accounted for in the audited Annual Financial Statement but are not permissible under GST
5K Adjustments on account of supply of goods by SEZ units to DTA Units
5L Turnover for the period under composition scheme
5M Adjustments in turnover under section 15 and rules thereunder
5N Adjustments in turnover due to foreign exchange fluctuations
5O Adjustments in turnover due to reasons not listed above
5P Annual turnover after adjustments as above
Turnover as declared in Annual Return (GSTR9) =5N+10-9 of GSTR-9
Un-Reconciled turnover
6 Reasons for Unreconciled differences in Annual Gross Turnover
7 Reconciliation of Taxable Turnover
7A Annual turnover after adjsutments=5P =5P
Less:
7B Value of Exempted, Nil Rated, Non-GST supplies, No-Supply turnover Net of Credit/Debit Notes/Amednments
7C Zero rated supplies without payment of tax Net of Credit/Debit Notes/Amednments
7D Supplies on which tax is to be paid by the recipient on reverse charge basis Net of Credit/Debit Notes/Amednments
7E Taxable turnover as per adjustments above
7F Taxable turnover as per liability declared in Annual Return (GSTR9) =4N of GSTR-9
7G Unreconciled taxable turnover (F-E)
8 Reasons for Unreconciled differences in Taxable Turnover
Reconciliation of Tax Paid
9 Reconciliation of Rate wise liability and amount payable
5% Forward/Reverse Charge payable by recipient
12% Forward/Reverse Charge payable by recipient
18% Forward/Reverse Charge payable by recipient
28% Forward/Reverse Charge payable by recipient
3%
0.25%
0.10%
Interest
Late Fee
Penalty
Others
9P Total amount to be paid
9Q Total amount paid as declared in Annual Return (GSTR 9) = Amount Payable as per Table 9 of GSTR-9
9R Unreconciled payment of amount
10 Reasons for Unreconciled payment of amount
11 Additional Amount payable but not paid (due to reasons specified under Tables 6,8, and 10 above)
5%
12%
18%
28%
3%
0.25%
0.10%
Interest
Late Fee
Penalty
Others
12 Reconciliaiton of Net ITC
12A ITC availed as per audited Annual Financial Statement for the State/ UT (For multi-GSTIN units under same PAN this should be derived from books of accounts) Figures as per annual audited accounts. GSTIN wise figures to be calculated if there are registrations in multiples states
12B Add:ITC booked in earlier Financial Years claimed in current Financial Year shall include transitional credit which was booked in earlier years but availed duringFinancial Year 2017-18
12C Less:ITC booked in current Financial Year to be claimed in subsequent Financial Years
ITC availed as per audited financial statements or books of account
ITC claimed in GSTR-9 = 7J of GSTR-9
Unreconciled ITC
13 Reasons for un-reconciled difference in ITC
14 Reconciliation of ITC declared in Annual Return (GSTR9) with ITC availed on expenses as per audited Annual Financial Statement or books of account
Description
14A Purchases
14B Freight/cartage
14C Power and Fuel
14D Imported Goods (included received from SEZ) Whether to be seggregated from purchase and capital goods
14E Rent and Insurance
14F Goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples
14G Royalties
14H Employees’ Cost (Salaries, wages, Bonus etc.)
14I Conveyance charges
14J Bank Charges
14K Entertainment charges
14L Stationery Expenses (including postage etc.)
14M Repair and Maintenance
14N Other Miscellaneous expenses
14O Capital goods
14P Any other Expense 1
14Q Any other Expense 2
14R Total Amount of Eligible ITC availed
14S ITC claimed in GSTR-9 = 7J of GSTR-9
14T Unreconciled ITC
15 Reasons for Unreconciled Difference in ITC
16 Tax payable on un-reconciled difference in ITC (due to reasons specified in 13 and 15 above)
Description Amount Payable
Central Tax
State/UT Tax
Integrated Tax
Cess
Interest
Penalty
Auditor’s recommendation on additional Liability due to non-reconciliation
5%
12%
18%
28%
3%
0.25%
0.10%
ITC
Interest
Late Fee
Penalty
Other Amount for supplies not included in Annual return
Erroneous refund to be paid back
Outstanding Demands to be settled
Others (Pl. specify)

Important observations on Certification by Auditor

1. Auditor to report on books of accounts, records and documents which have not been maintained as required as per GST law.

2. Auditor to verify in Form 9C that nothing has been concealed.

D. Conclusions:

GSTR-9 and GSTR-9A had already been introduced on 04-09-2018 and now GSTR-9C has also been introduced on 13-09-2018. This completes the tally for taxpayers who are already into the process of finalizing their tax audits. Although annual return and reconciliation statements can be furnished till 31st December but need to be finalized along with tax audits in the interest of the assesses.

Author Bio

More Under Goods and Services Tax

Leave a Comment

Your email address will not be published. Required fields are marked *