Like the Income Tax Act, 1961 the provisions for deduction of Tax at source by certain entities/person has also been enacted in GST Acts 2017. Initially, these provisions are for Government Department/establishment/ Agencies or local authorities etc. Section 51 of CGST Act deals with provisions of Tax deduction at source, payment of tax, issuance of certificate and other related provisions. TDS provision under GST is an overriding provision which overrides all other provisions of the Act, it means if a person is covered under section 51 then it has to comply with the TDS provisions even though it is liable to pay GST under any other provision of the Act.

Government vide Notification No. 33/2017 – Central Tax, appointed 18th day of September, 2017 as the date on which the provisions of TDS of the said Act shall come into force. Date from which these persons shall be liable to deduct tax from the payment made or credited to the supplier of taxable goods or services or both will be notified subsequently. [The provisions of TDS under GST Act were deferred by govt. through press release dated 26/06/2017]

Persons who are liable to deduct tax at source
“the deductor”
(a) a department or establishment of the Central Government or State Government; or

(b) local authority; or

(c) Governmental agencies; or

(d) such persons or category of persons as may be notified by the Government on the recommendations of the Council,

 

Persons notified vide Notification No. 33/2017 – Central Tax

(a) an authority or a board or any other body, –

(i) set up by an Act of Parliament or a State Legislature; or

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(ii) established by any Government,

with fifty-one percent or more participation by way of equity or control, to carry out any function;

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

(c) public sector undertakings

Value on which Tax to be deducted The tax to be collected on invoice value excluding the central tax, State tax, Union territory tax, integrated tax and cess indicated in the invoice.
Rate of deduction of tax @ 1% as CGST and similar rate notified under State Acts, so total tax to be deducted is 2%

1% CGST

1% SGST

Limit above which tax to be deducted Tax needs to be deducted at specified rate if the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees
Time limit to deposit tax& rate of interest in case of default in deposit Deductor shall deposit tax within ten days after the end of the month in which such deduction is made,

Rate of interest: interest needsto be paid @18% p.a. in case of default in payment of tax deducted

Particulars & time of issuance of Certificate of deduction of tax Deductor shall issue certificate within five days of crediting the amount so deducted to the Government.

Particulars:

i. the contract value,

ii. rate of deduction,

iii. amount deducted,

iv. amount paid to the Government

v. Other particulars as may be prescribed

Late fees for non-issue of certificates • 100/- rupees per day, maximum five thousand rupees

• Late fees applicable from the day after the expiry of such five days period until the failure is rectified.

Returns to be filed by deductor Every deductor is required to file monthly return of GST for deduction of tax within ten days after the end of such month
Registration of deductor under GST Every person who is required to deduct tax as per the provisions of Sec 51 of CGST Act shall get himself registered under the Act. In order to get himself required specified person is required to have a Tax Deduction and Collection Account Number issued under the Income tax Act, 1961

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7 responses to “Applicability of TDS under GST (Sec-51) WEF 18.09.2017”

  1. AKSHATA says:

    SIR,

    WHEN ADVANCE RECEIVED IN JUNE 17 BUT BILLING IN SEPTEMBER . WE PAID 15 STAX ON ADVANCES . BUT BILL MAKE UNDER GST SO HOW TO SHOW THIS BILL IN GST PORTAL.

  2. B K MOHANTY says:

    Should the CA Firm get registered under GST even if the Income is below the treshold limit just because the Statutory Bank Branch Audit fees paid by the Bank HQ located in other State ?
    Further, whether the Bank is supposed to deduct TDS even if the the Firm declares that it is not Registered under GST ?

    • cavikannuyadav says:

      As per Sec 24 if you are making interstate outward supply then you shall get registered, threshold benefit is not available in this case. If you are billing to branch in other state then registration is mandatory.

      Liability to deduct TDS doesn’t depend upon status of recipient (whether registered or not), it is responsibility of deductor to deduct and he is supposed to deduct if covered under person specified under Sec 51.

  3. MANOJ BHIDE says:

    Dear Sir,
    Every person who is required to deduct tax as per the provisions of Sec 51 of CGST Act shall get himself registered under the Act. In order to get himself required specified person is required to have a Tax Deduction and Collection Account Number issued under the Income tax Act, 1961.

    But on the GST Portal we still cannot see registration thru TAN , as only PAN is reflecting on Registration page.
    Govt has only given starting date of 18/9/2017 without opening registration page thru TAN.

    Pl. let us know how to follow the rules as per notification without registration.?

    • cavikannuyadav says:

      You are right sir, registration process is yet to start and date from deduction of tax is also yet to be notified. Hopefully soon the facility of registration will start on portal.

      • cavikannuyadav says:

        TDS Deductor Registration Has been enabled on GST Portal

        Now you can apply GST TDS Deductor Registration from today.

        It can be applied through PAN / TAN issued in the name of Government department as specified in Sec.51.

    • cavikannuyadav says:

      TDS Deductor Registration Has been enabled on GST Portal

      Now you can apply GST TDS Deductor Registration from today.

      It can be applied through PAN / TAN issued in the name of Government department as specified in Sec.51.

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