TDS UNDER GST

1. Commercial Taxes Department
Telangana State
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2. Introduction
• 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.
• GST Act replaced Central Acts such as Central Excise
duty, Service Tax, Central Surcharges etc. and State Acts
such as VAT Act, CST Act, Luxury Tax, Entertainment Tax,
Entry Tax etc.
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3. Some Key words:
 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.
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4. Legal provision
• Tax deduction at Source by the notified category of
persons is mandatory as per Section 51 of the CGST and
TGST Acts, 2017.
• Registration as a Tax Deductor is to be taken separately
even if the person / undertaking etc. is having GSTIN for
business purposes.
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5. The following persons need to deduct TDS
1. A department or establishment of the Central or State
Government, or
2. Local authority, or
3. Governmental agencies, or
4. An authority or a board or any other body which has been set up by
Parliament or a State Legislature or by a government, with 51% equity
(control) owned by the government.
5. A society established by the Central or any State Government or a Local
Authority and the society is registered under the Societies Registration
Act, 1860.
6. Public sector undertakings.
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6. 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
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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
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7. Rate of TDS
• TDS is to be deducted at the rate of 1% under Telangana
GST and 1% under Central GST or 2% IGST from the
payments made to the supplier of taxable goods and/or
services, where the total value of such supply, exceeds
two lakh fifty thousand rupees under a contract.
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8. Illustration
 (a) For instance gross taxable contract value is Rs 2,70,000/-
 Supply value before tax is Rs 241071/-
 SGST and CGST collection @ 12% - Rs 28929/-
 Total – Rs 270000/-, in this case TDS is not applicable as net value of contract is less
than Rs 250000/-.
 (b) For instance gross taxable contract value is Rs 3,10,000/-
 Net Rs 276786/-
 SGST and CGST collection @ 12% - Rs 33214/-
 Total – Rs 310000 /-, in this case TDS will be @ 1% each under SGST and CGST
is applicable as net value of contract is more than Rs 250000/-.
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9. Intra-State supply
Generally, when both the supplier and the recipient are
within the State, the supply is “Intra State Supply”
(within the State Supply). In such case, TDS of 1% CGST
and 1% SGST shall be made.
Inter-State supply
Generally, when the supplier is in a State other than the State
of the receiver (i.e. the supply is from outside the State), the
supply is Ïnter State supply”and TDS of 2% IGST shall be
made.
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10. Filing of Return and issue of TDS certificate
1. 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. Eg. If TDS is made in
the month of October, 2018, the Return in GSTR 7 shall be filed before 10th
November, 2018.
2.If in any month there is no deduction on account of TDS, no need of file return for
that month.
3. They need to issue a certificate in form GSTR-7A to the supplier within 5 days of
filing of return in Form GSTR – 7 mentioning therein the contract value, rate of
deduction, amount deducted, the amount paid to the appropriate
Government. GSTR-7A is generated online by the system.
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11. When TDS not applicable
 a) Total value of taxable supply ≤ Rs. 2.5 Lakh under a contract.
 b) Contract value > Rs. 2.5 Lakh for both taxable supply and exempted
supply, but the value of taxable supply under the said contract ≤ Rs. 2.5
Lakh.
 c) Receipt of services which are exempted. For example services exempted
under notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 as
amended from time to time.
 d) Receipt of goods which are exempted. For example goods exempted
under notification No. 2/2017 – Central Tax (Rate) dated 28.06.2017 as
amended from time to time.
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12. When TDS not applicable ….
 e) Goods on which GST is not leviable. For example petrol, diesel,
petroleum crude, natural gas, aviation turbine fuel (ATF) and alcohol for
human consumption.
 f) Where a supplier had issued an invoice for any sale of goods in respect
of which tax was required to be deducted at source under the VAT Law
before 01.07.2017, but where payment for such sale is made on or after
01.07.2017 .
 g) Where the location of the supplier and place of supply is in a State
which is different from the State where the deductor is registered.
 Where the tax is to be paid on reverse charge by the recipient i.e. the
deductee.
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13. How can the Deductee claim the benefit of TDS?
Any amount deducted as TDS and reported in GSTR – 7 will
automatically reflect in electronic cash ledger of the Deductee.
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14. Refund of the excess amount deducted
In case the amount is
claimed by the deductee in
his electronic cash ledger
In case the amount is not so
claimed by the dealer
Refund to deductor is not possible in such case.
However, deductee can claim a refund of tax
subject to refund provisions of the act.
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)
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15. Requirements for registration
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 DDO/ Aadhar verification / EVC
(e) If authorized signatory is other than DDO then passport size photo of
such person.
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16. Introduction
Slide 16
Payment Modes
Payments
GST Payment Modes
Online Payments
Credit/Debit card Internet Banking
Other Payment Methods
Over the Counter NEFT/RTGS
NOTE: All payments are deposited into the Electronic Cash Ledger & funds are utilized from it when taxpayer makes payments for liabilities.

17. Penal Provisions
 Registration:
Section 25(1): Every person who is liable to be registered under Section 22 (regular registration) or
Section 24 (TDS etc) shall apply for registration within thirty days from the date on which he becomes
liable to registration.
 Failure to take Registration
Section 122(1) (xi) – Offences & Penalties:
Where a taxable person who is liable to be registered under this Act but fails to obtain registration –
shall be liable to pay a penalty of ten thusand rupees or an amount equivalent to the tax evaded or
the tax not deducted under Section 51 or short deducted or deducted but not paid to the
Government .. Or input tax credit availed of or passed on or distributed irregularly, or the refund
claimed fraudulently, whichever is higher.
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18. Penal Provisions
 Failure to furnish the certificate in form GSTR-7A to the deductee by the deductor after deducting
the tax at source, within five days of crediting the amount so deducted to the Government: The
deductor shall pay, by way of a late fee, a sum of one hundred rupees per day from the day after the
expiry of such five day period until the failure is rectified, subject to a maximum amount of five
thousand rupees. ---- Section 51(4)
 Failure to pay to the Government the amount deducted: The deductor shall pay interest at a rate
not exceeding eighteen percent in addition to the amount of tax deducted. ----- Section 51(6)
 Failure to deduct the tax or deducts an amount which is less than the amount required to be
deducted or failure to pay to the Government , the amount deducted as tax: Liable to pay a penalty
of ten thousand rupees or an amount equivalent to the tax evaded or the tax not deducted or
deducted but not paid to the Government, whichever is higher. ----- Section 122(1)
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