Recently Central Government has issued notification No. 50 – 2018; Dated 13/09/2018, giving a final green signal for the implementation of TDS under GST (Section 51 of CGST) with effect from 1st October 2018. I tried to compile the provisions of the section 51 in One Single Table to understand the same quickly and effectively.
Provisions of TDS under GST
(Applicable from 1st October 2018)
|1||Relevant Section||Sec. 51 (CGST Act & SGST Act); Sec. 20 (IGST Act).|
|2||When to Deduct?||The specified class of person* shall be required to deduct tax at source on the payment made or credited to the supplier. where the total value of supply under a contract exceed Rs.2,50,000/-excluding GST.|
|3||Rate at which Deducted?||Intra State: 2% (CGST 1% + SGST 1%) or Inter State: 2% IGST|
|4||Form or Return to be Furnished?||Form GSTR – 7.|
|5||Due date to file Return?||Within 10th of succeeding month.|
|6||Due Date to Deposit TDS Under GST with the Government?||Within 10th of succeeding month in which TDS deducted.|
|7||TDS Certificate under GST:|
|a.||Who is required to issue TDS Certificate?||Deductor (the person who is deducting tax).|
|c.||Due Date to Issue Certificate?||Within 5 days of crediting the amount to the Government.|
|d.||Late fees if not issued within Time?||Rs.200 per day (Rs.100 CGST + Rs.100 SGST) from the expiry of the 5th day till the certificate is issued.|
|8||When TDS not to be Deducted?||When both the place of supplier as well as the place of supply are different from that of the place of recipient. See Example Below **.|
* Specified Class of Persons: –
(a) a department or establishment of the Central Government or State Government; or
(b) local authority; or
(c) Governmental agencies (like ministry of Agriculture Dept or Ministry of Home Affairs); or
(d) Following categories of person has been notified vide Notification No. 33/2017-Central Tax Dated 15th Sept 2017 under clause 51(1)(d)
a. 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 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
** Example explaining Point 8 (When TDS not required to Deduct): –
Registered dealer of Mumbai (Maharashtra), the recipient, has placed supply order to a registered dealer of Surat (Gujarat), the supplier, for delivery of material to a party in Ahmedabad (Gujarat). 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 Maharashtra i.e. recipient State, to the cash ledger of the supplier (Central tax + State tax) of Gujarat would be difficult. So, in such cases, TDS would not be deducted.
Thus, when both the supplier as well as the place of supply are different from that of the recipient, no tax deduction at source would be made.