Goods and Services Tax – GST – By: – CA.Tarun Agarwalla – Dated:- 27-9-2018 Last Replied Date:- 30-9-2018 – At the advent of Not. No. 50/2018 – Central Tax Dated 13.09.2018, the following exposition has been drawn out to present a comprehensive picture in regards to the law and the practice of deducting tax at source in so far as the Goods and Services Tax. The exposition has been divided into two parts: 1. The Law surrounding TDS 2. The practice to be followed for necessary compliance with the Law The above has been elaborated as follows: 1. The Law surrounding TDS: A. Background:-The provisions of tax deduction at source is contained under section 51 of the CGST Act, 2017. The same was held in abeyance and not brought into force. As of 13.09.2018 the Notification No. 50/2018 – Central Tax notified the 1stday of October 2018 to be the day sec. 51 of the CGST Act, 2017 assumes legal force. Section 51 comes under the Chapter X Payment of Tax which deals with the manner of payment of GS
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fifty-one per cent or more participation by way of equity or control, to carry out any function. e. Society established by the Central Government or State Government or local authority under the Societies Registration Act, 1860 f. Public sector undertakings. C. Manner and quantum of deduction:-The above-mentioned persons are, hereinafter referred to as deductor, are required to deduct tax at the rate of 1% CGST and 1% SGST on the taxable value of goods or services or both. a. At the time of payment made or credited to the supplier (deductee) of taxable goods or services or both, b. Where the total value of supply, under a single contract, exceeds two lakh fifty thousand rupees, the deduction is to be made. i. e. Single contract value above ₹ 2.5 Lakh and above. c. Value for the purpose would be basic taxable value, i. e. excluding CGST, SGST, IGST, UTGST and cess charged. d. Only when the supplier (deductee) is registered in the concerned state and the place of supply is also in
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e the value of supply credited prior to 01.10.2018 but payment made on or after 01.10.2018, or vice versa, it seems that in both the cases TDS to be deducted. b. The supply must be taxable under the law. i. e. exempted supplies does not attract TDS. c. From the law, it seems that IGST transactions are beyond the preview of current compliances. d. In case the supplier is not registered, it seems that the TDS may not be made. e. The single contract value of greater than ₹ 2.5 Lakh would be considered, even though the contract period may extend to different tax periods and year. TDS would be deducted at the time of each invoice or payment. f. Further, it can be reasonably derived that once the TDS made on credit basis, no TDS at the tie of respective payment. However, when a particular payment could not be linked to a single invoice, suitable co-relation to be maintained to safeguard the correctness of time of deduction. g. Mr A of Delhi got an order from WB government to supply cer
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ithin three days of application. Step: 2 Deduct GST @ 1% CGST & 1% SGST (i.e. as correctly charged by the inward supplier in his Tax Invoice) from the Basic Value of the Bill. The rate of TDS is to be computed on the value of supply excluding the GST amount. The deduction is to be at the time of payment to the supplier or crediting his account. However, two broad conditions for deductions are: a. The supply should be a taxable supply of goods or services or both. b. The total value of the contract exceeds ₹ 2,50,000/- Step: 3 The amount that has been so deducted is to be deposited with the respective Government within 10 days from the end of the month in which such deduction is made. Such payment to the Govt. shall be made by debiting the electronic cash ledger. Further, the deductor is required to furnish a return in form GSTR-7 electronically along with all necessary details. The return cannot be filed without full payment of the liability. Copy of form GSTR-7 has been encl
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