Concept and Applicability of TDS and TCS provisions w.e.f. October 1, 2018
By: – Bimal jain
Goods and Services Tax – GST
Dated:- 25-10-2018
After getting deferred till September 30, 2018, the Central Government vide Notification No. 50/2018 – Central Tax dated September 13, 2018 and Notification No. 51/2018 – Central Tax dated September 13, 2018, has appointed the 1st day of October 2018, as the date on which the provisions of Section 51 of the CGST Act, 2017 (i.e. Tax deduction at source) and Section 52 (i.e. Tax collection at source) shall come into force.
For easy digests, we are summarizing hereunder the gist of provisions pertaining to TDS and TCS in GST:
Tax Deduction at Source (TDS) under Section 51 of the CGST Act, 2017 read with Rule 66 of the CGST Rules, 2017
Particulars
Applicable Section/ Sub-section/ Notification
Provisions
Who is required to deduct TDS (deductor)?
Section 51(1) r.w. Notification No. 50/2018 – Central Tax dated September 13, 2018
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te of TDS
Section 51(1)
TDS is to be deducted at the rate of 1% [i.e. 2% for CGST+SGST/UTGST or IGST] from the payment made or credited to the deductee
Value of supply
Explanation to Section 51(1)
For the purpose of TDS specified above, the value of supply shall be taken as the amount excluding CGST, CGST/UTGST, IGST and cess indicated in the invoice
Compulsory registration for TDS deductor
Section 24(vi)
TDS deductors, whether or not separately registered, are required to compulsorily register in GST irrespective of threshold limits.
Form for TDS deductor registration
Rule 12(1)
Form GST REG-07 – Registration started from September 18, 2017(The Goods and Services Tax (GST) Council, at its 21st meeting in Hyderabad) TDS applicants who do not have a PAN, can register on basis of TAN
Payment of TDS by deductor
Section 51(2)
The amount of TDS shall be paid to the Government by the deductor within 10 days after the end of the month in which such deduction is made.
TDS Certif
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per day from the day after the expiry of five days period until the failure is rectified, subject to a maximum amount of INR 5,000/- [i.e. INR 2,000/- per day subject to maximum of INR 10,000/- for CGST + SGST/UTGST]
Recovery & Refund
Determination of amount in default
Section 51(7)
In accordance with Section 73 (determination of tax in non-fraud cases) or Section 74 (determination of tax in fraud cases) of the CGST Act, 2017
Refund of excess deduction
Section 51(8)
Refund to deductee arising on account of excess or erroneous deduction shall be dealt in accordance with Section 54.
No refund shall be granted if the amount deducted has been credited to electronic cash ledger of deductee.
Collection of tax at Source (TCS) under Section 52 of the CGST Act, 2017 read with Rule 67 of the CGST Rules, 2017
Particulars
Applicable Section/Sub-section/ Notification
Provisions
Who is required to collect TCS?
Section 52(1)
Every electronic commerce operator (“operator”), not being
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ll be done by the operator by paying the supplier, the price of the product/ services, less the amount of TDS.
Rate of TCS
Section 52(1)
TCS is to be deducted at the rate not exceeding 1% of the net value of taxable supplies of the goods/services supplied through the portal of the operator
Meaning of 'electronic commerce operator'
Section 2(45)
“Electronic commerce operator” means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce
Meaning of 'electronic commerce'
Section 2(44)
“Electronic commerce” means the supply of goods or services or both, including digital products over digital or electronic network
Meaning of 'Net value of taxable supplies'
Explanation to Section 52(1)
“Net value of taxable supplies” shall mean the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator
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operator within 10 days after the end of the month in which such collection is made.
TCS statement
Section 52(4), 52(5) & 52(6) r.w. Rule 67(1) & 80(2)
The operator is required to furnish a monthly statement in Form GSTR-8 by the 10th of the following month.
The operator is also required to file an Annual statement in Form GSTR-9B by the 31st of December following the end of every financial year.
The operator can rectify errors in the statements filed, if any, latest by the return to be filed for the month of September, following the end of every financial year or the actual date of furnishing relevant annual statement, whichever is earlier.
ITC to supplier
Section 52(7)
The tax collected by the operator shall be credited to the cash ledger of the supplier who has supplied the goods/services through the operator. The supplier can claim credit of the tax collected and reflected in the return by the Operator in his [supplier's] electronic cash ledger.
Matching of details of sup
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