Tax Deduction at Source as per section 51 of Goods and Services Act, 2017 and procedure to be followed by Departments or establishments of Local Authority, State Government, Local Authority, Governmental agencies.
27 T of 2017 Dated:- 7-7-2017 Maharashtra SGST – Circular
GST – States
Office of the
Commissioner of State Tax, (GST)
8th floor, GST Bhavan,
Mazgaon, 400010.
TRADE CIRCULAR
To,
………………………..
………………………..
No. JC/HQ-II/GST/TDS/Section-51/2017-18/455
Mumbai, Date 07/07/2017
Trade Cir. No. 27 T of 2017
Subject: Tax Deduction at Source as per section 51 of Goods and Services Act, 2017 and procedure to be followed by Departments or establishments of Local Authority, State Government, Local Authority, Governmental agencies.
Sir/Gentlemen/Madam
The Maharashtra Goods and Services Tax Act, 2017, (hereinafter referred to as the “MGST Act”)
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ent or the State Government or local authority, or Government Agencies to Deduct Tax at Source (hereinafter referred to as the “TDS”). These authorities are referred as the “Deductor” and the supplier of goods and services is referred to as “Deductee”.
3. The deductor, in case of a contract where the total value of supply of taxable goods or services or both exceeds ₹ 2.5 Lakh (two lakh and fifty thousand) under a contract shall deduct 1% each for MGST and CGST, from the payment made or credited to the deductee i.e. where the supply is of taxable goods or services or both. The tax so deducted should be paid separately Therefore, every Deductor under MGST and CGST is required to deduct tax at the rate of one per cent each. Thus total deduction would be 2%.
4. It should be kept in mind that for the purpose of calculation of amount of two lakh and fifty thousand rupees, the central tax, state tax, integrated tax or the cess charged separately in the invoice should be excluded. In
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form and discharge following functions,-
(a) Online/electronic payment of TDS so deducted;
(b) Filing of returns online.
(c) Online issuance of TDS Certificate to the supplier.
7. It is needless to add if the supplier for any reason has not shown tax separately in the invoice then in such eventuality the Deductor is required to make TDS on the entire value without considering the tax impact provided that the amount covered by said invoice is liable for deduction of TDS. It is clarified that, TDS is liable to be deducted on part payment or full and final payment as the case may be, if a particular contract of supply of goods or services is eligible for deduction of TDS.
8. The procedure for registration of deductor, payment of tax deducted to Government, issuance of TDS Certificates etc. are explained as under.
(1) Registration of TDS deductors:
(a) Section 24(vi) of CGST/MGST Act, 2017 provide compulsory registration for deductors without any threshold limit. Deductor will be
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download registration certificate in Form GST REG-06 from portal.
(d) If liability to deduct TDS of any deductor ceases in future, an application can be uploaded on portal requesting cancellation of registration and said registration certificate will be cancelled.
(2) Payment of TDS –
(a) Every deductor is required to pay electronically to the Government the TDS deducted by him within 10 days from the end of the month in which deduction is made.
(b) The deductor would be liable to pay interest as provided under section 50(1) of MGST Act and CGST Act, if the tax deducted is not deposited within prescribed time.
(3) Filing of return by deductors –
(a) Deductor will be required to file a return in Form GSTR-7 within 10 days from the end of month in which deduction is made. If in any month there is no deduction on account of TDS, deductor is not required to file return for that month.
(b) The details of tax deducted at source furnished by the deductor in Form GSTR-7 shall be made
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s not issued within prescribed time, deductor would be liable to pay late fee of ₹ 100/- per day from the expiry of the 5th day till the TDS certificate is issued. This late fee would not be more than ₹ 5000/-.
(6) Refund of TDS –
(a) Any excess or erroneous tax deducted and paid to the Government by deductor will be refunded as provided under section 51 (8) of the CGST or the MGST Act, 2017.
(b) However, if the deducted amount is already credited to electronic cash ledger of the said supplier, then same shall not be refunded.
(7) Transitional provision in respect of TDS –
(a) As per the section 142(13) of the MGST Act where supplier has made sale of any goods before the appointed day i.e. on or 30th June 2017 and invoice has also been issued on or before the 30th June 2017 in such circumstances the TDS provisions under GST Act will not be applicable despite the fact that the payment in respect of said sale is received on or after the 1st July 2017.
(b) In other wor
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