In addition, as per GST law, certain categories of registered persons will be required to deduct taxes while making payments to supplier i.e TDS and deposit it with the government. Let’s try to understand TDS related procedures under the revised law.
| S. No. | Particulars | Descriptions |
| 1 | Persons responsible | •TDS on supply of notified goods / services
•Persons responsible for deducting tax – Department or Establishment of Central or State Government / Local authority / Government Agencies / Such persons or categories of person as notified by the Government |
| 2 | Rate and value | •TDS will be applicable where the total value of such supply, under a contract, exceeds rupees 2.5 lacs – Value is excluding taxes value
•TDS will be deducted @ 1% from the payment made or credited to the supplier |
| 3 | Time limit | •Tax deducted to be deposited within 10 days of the end of the month in which tax is deducted |
| 4 | To whom would you pay the TDS | The payment shall be made to the appropriate government which means:
•The Central Government in case of the IGST and the CGST •The State government in case of the SGST. |
| 5 | Contenting of Tds Certificate | •TDS Certificate to be furnished giving the details of contract value, rate of deduction, amount deducted, amount paid and other relevant particulars |
| 6 | Penal Provision | •If deductor fails to issue TDS certificate within 5 days of crediting such amount to Government, he will be liable to pay late fees of Rs. 100/- per day maximum upto Rs. 5,000/-. |
| 7 | Deductors need to follow these listed procedural compliances: | •Such deductor needs to get compulsorily registered under section 23.
•Obtaining TAN issued under income tax act is MANDATORY •They need to remit such TDS collected by the 10th day of the month succeeding the month in which TDS was collected and reported in GSTR 7. •The amount deposited as TDS will be reflected in the electronic cash ledger of the supplier. •They need to issue a certificate of such TDS to the deductee within 5 days of deducting TDS mentioning therein the contract value, rate of deduction, amount deducted, the amount paid to the appropriate Government and such particulars as may be prescribed. Non-deduction / short deduction / non-payment or short payment of TDS is on offence under the act for which a minimum penalty of Rs 10000/- is prescribed under the act. |
| 8 | Others | •Deductee shall claim credit in the electronic cash ledger
•If deductor fails to pay the TDS to the credit of the Government, interest will be leviable •Determination of the amount in default shall be in accordance with section 66 or 67 •Refund of wrong deduction will be made in accordance with provisions applicable to refund specified in Section 48 – no refund to deductor shall be granted if the amount deducted has been credited to the electronic cash ledger of the deductee |
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