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TDS under Goods & Services Tax (GST)

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

What is the rate of TDS

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

Value on which TDS shall be deducted

  • TDS shall be deducted on basic value excludind 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 10,00,000
2 GST Charged on Invoice 1,80,000
3 Total Invoice Value 11,80,000
4 TDS to be deducted by B Ltd (10 Lacs X 2%) 20,000

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 3,00,000
GST on the above PO value- @18% 45,000 54,000
Total Purchase Order Value 2,95,000 3,54,000
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

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

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

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

Accounting of TDS Under GST

1. Creation of three general ledger in books

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

2. Aforesaid accounts will be debited with amount of credit in respective Electronic Cash Ledger (ECL) made by deductor in GST portal.

3. At the time of utilisation of TDS amount 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.

Click here to Get GST TDS Notification

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