Easy and point wise analysis of TDS Under GST

1. TDS under GST (Section 51 of CGST Act)- Applicable from 1st October 2018

Who Is Liable To Deduct TDS – Section 51(1)

1. Central or State Govt Departments or Establishments

2. Local authority

3. Governmental agencies

4. Entities where 51% Equity or control owned by Govt.

5. Registered Societies of Central or State Govt and Local Authority

6. Public sector undertakings

2. What is the rate of TDS

Rate and Type of TDS {Section 51(1)}

1. Interstate= 2% IGST

2. Intrastate= 1% CGST +1 %SGST

3. Value on which TDS shall be deducted

TDS shall be deducted on basic value excluding GST charged on the invoice for supply of goods, services or both. {Explanation to Section 51 (1)}

• Example: A Ltd invoice to B Ltd

S.No	Invoice Particulars	Amount (Rs.)
1	Base value of Invoice	20,00,000
2	GST Charged on Invoice	3,60,000
3	Total Invoice Value	23,60,000
4	TDS to be deducted by B Ltd (20 Lacs X 2%)	40,000

4. TDS is not required to be deducted

Single contract value excluding GST does not exceed Rs. 2,50,000/- .{Section 51(1)}

Example: B Ltd gives two separate PO/ Contracts to A Ltd

Particulars	Purchase Order No. 01	Purchase Order No. 02
Purchase Order Value excluding GST	2,50,000	6,00,000
GST on the above PO value- @18%	45,000	1,08,000
Total Purchase Order Value	2,95,000	7,08,000
Applicability of TDS	NO	Yes

TDS is not required to be deducted

• When supplier and place of supply is in the same State and the Recipient is registered in another State. {Section 51(1)}
• No TDS deduction on supplies from Unregistered person(Notification No 9/2017-Central Tax)
• Example: Cases

Sl. No.	Location of Supplier (A Ltd)	Place of Supply	State of registration of recipient (B Ltd)	Type of Supply	TDS under GST	Type of GST
1	Delhi	Delhi	Delhi	Intra State	Yes	CGST+SGST
2	Delhi	Haryana	Haryana	Inter State	Yes	IGST
3.	Delhi	Haryana	Karnataka	Inter State	Yes	IGST
4.	Delhi	Delhi	Haryana	Intra State	No	Not Applicable

5. When to Deduct TDS

• On payment to the supplier or credit to the account of supplier.{Section 51(1)}

Example: Service Contract Value Rs. 1 Crores

Particulars	10% Advance Money received (Rs in Lacs)	Subsequent Invoice (Rs in Lacs)
Base Value	10	5
Add GST Charged	1.80	0.90
Total amount to received	11.80	5.90
TDS Deduction -@2%	0.20	0.10

6. TDS Deductor Compliance

Compliance	Time Limit/ Penal Provision
Registration requirement {Section 24 (vi)} read with { Section 25(6)}	Compulsorily registration and there is no threshold limit for this Apply for registration GST REG-07 filling Income Tax TAN number.
Date of deposit of TDS {Section 51(2)}	10th day of Next Month
Filing of TDS return {Section 39 (3)}	Same as above
Issue of TDS certificate {Section 51(3)}	Within 5th day of payment
Late Fees for not issuing the TDS Certificate {Section 51(4)}	Rs. 100 per day (Maximum Rs. 5,000)
Late filing of TDS return{Section 51(4)}	Same as above
Interest for non-payment of TDS {Section 51(6)}	18% Per annum

7. Credit of TDS to the Supplier

• Supplier can utilise TDS deducted by deductor which will be automatically reflected in its Electronic Cash ledger upon furnishing TDS return by deductor. {Section 51(5)}

Example:

 Refund of TDS under GST

• Refund to Deductor {Section 51(8)}

> Can claim excess or erroneous refund if TDS is not already added to the electronic cash ledger of the supplier.

• Refund To Deductee {Section 51(8)}

> Refund application of excess balance in Electronic Cash Ledger shall be filed.

• Time Limit for Refund

(Section 54 (1) + Explanation 2 to Section 54)

> Online application shall be filed with 2 Years from the date of payment of Tax/TDS 

8. Accounting of TDS Under GST

1. Creation of three general ledgerin books

• CGST TDS Receivable Account
• UT/SGST TDS Receivable Account
• IGST TDS Receivable Account

2. Aforesaid accounts will be debitedwith amount of creditin respective Electronic Cash Ledger (ECL) made by deductor in GST portal.
3. At the time of utilisation of TDSamount from ECL for payment of GST liability in GST portal correspondingly above TDS Receivable account will credited in respective Output GST liability or GST Liability clearing account in books as per GL configuration

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