tds on gst
Taxable Supply: means the supply of goods or services or both which is leviable to tax under GST Act.
Deductor: Deductor is the person who is required to deduct TDS for a supply from a supplier.
Deductee: The supplier from whom tax is deducted.
Who need to deduct TDS
The following persons need to deduct TDS
- A department or establishment of the Central or State Government, or
- Local authority, or
- Governmental agencies, or
- Persons or category of persons as may be notified, by the Central or a State Government on the recommendations of the Council.
Value of supply on which TDS shall be deducted
For the purpose of deduction of TDS, the value of purchases or contract is to be taken as the amount excluding the tax indicated in the invoice. This means TDS shall not be deducted on the CGST, SGST or IGST component of invoice
To whom would you pay TDS
TDS shall be paid within 10 days from the end of the month in which tax is deducted. The payment shall be made to the appropriate government, which means:
CENTRAL GOVERNMENT - In case of IGST & CGST
STATE GOVERNMENT - In case of SGST
Further, deductors need to follow these listed procedural compliances:
- Deductors shall be registered under section 24
- TAN/PAN is MANDATORY
- TDS deducted should be reported in a return form GSTR 7 by the 10th day of the month succeeding the month in which TDS was collected.
- The amount deposited as TDS will be reflected in the electronic cash ledger of the supplier.
- They need to issue a certificate in form GSTR-7A to the supplier within 5 days of deducting TDS mentioning therein the contract value, rate of deduction, amount deducted, the amount paid to theappropriate Government.
- 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.
How can the Deductee claim the benefit of TDS?
The supplier (deductee) shall claim credit, in his electronic cash ledger, of the tax deducted and reflected in the return GSTR-7 filed by the deductor. Any amount deducted as TDS and reported in GSTR – 7 will automatically reflect in electronic cash ledger.
Refund of the excess amount deducted
- In case the amount is claimed by the taxable person in his electronic cash ledger
- Refund to deductor is not possible in such case. However, deductee can claim a refund of tax subject to refund provisions of the act. Practically it is not possible to claim any erroneous deduction of TDS by the deductor.
- In case the amount is not so claimed by the dealer
- Refund of erroneous excess TDS deducted is possible to deductor, subject to refund provision and procedure of the act. (This condition arises when deductor not filed return GSTR-7)
The preconditions for registering under GST as a tax
1. Applicant must have a valid PAN or a TAN.
2. Valid mobile number.
3. Valid E-mail ID.
4. Applicant must have the following documents and information on all mandatory fields as required for registration.
(a) Passport size photo (<100KB in JPEG format)
(b) PAN card
(c) Address proof
for Own premises: Latest Property Tax receipt or Electricity bill
for Rented or Leased premises: Valid Rent / Lease agreement along with ownership proof like property tax receipt or electricity bill
for premises not covered above: A consent letter with any document in support of the ownership like property tax or electricity bill.
(d) DSC of the DDO.
(e) If authorized signatory is other than DDO then passport size photo of such person.
GST Key Information
What is GST?
Goods and Services Tax is an indirect tax levied on the supply of goods and/or services. It is a destination based tax. The GST would apply to all goods other than alcoholic liquor for human consumption and five Petroleum products.
The persons whose turnover in a financial year is more than Rs.20 Lakhs are need to be registered under GST. For registering under GST, PAN is compulsory. All the registered taxable persons will get a 15 digit PAN based GSTIN.
GST would replace the following indirect taxes:
GST Marjor Taxes
SGST: Levied by State Government for supplies made within the state.
CGST: Levied by Central Government for supplies made within the state.
IGST: Levied on inter-state transactions.