TDS Under GST

Compiled By –
Mohd Faraz | Executive | Indirect Tax Vertical
Asija & Associates LLP | Chartered Accountants
gst@asija.in
Chapter X of CGST Act
Read with CGST Rules prescribed

 Who is liable to deduct GST - TDS
 Registration for Deduction GST
 Rate and Value on which GST shall be deducted
 Time line and Process for Payment of TDS – GST to Government
 Filing of TDS – GST Return by the Deductor
 Time line and Process for issuance of Certificate of TDS – GST by the deductor to
Deductee.
 Refund of Excess Tax Deducted
 Comparison of TDS provision VAT vis a vis GST
 Miscellaneous Provision.
Content of Presentation
gst@asija.inGST Wing | Asija & Associates LLP

 What is TDS in GST?
TDS is a mechanism wherein the specified class of recipient of supply goods or
services (hereafter referred as GST Deductor) will deduct GST at rate of 1% from the
payment made or amount credited to the supplier (hereafter as "the Deductee") of
taxable goods or services or both.
 Who is liable to deduct TDS?
The Central government or state government may mandate the following person to
deduct TDS :
 A Department or Establishment of the Central or State government
 Local Authority
 Government Agencies
 Such persons or category of persons as may be notified, by the Central or State
government on the recommendations of the council.
Who is Liable to Deduct TDS-GST

 Who is liable to deduct TDS?
 As per Notification Number 33/2017 dated 15/09/2017, with effect from
18/09/2017 government has notified the following additional person who shall be
required to deduct TDS under GST:-
 An Authority or a Board or any other body, -
i. Set up by an Act of Parliament or a State Legislature; or
ii. Established by any Government,
with 51% or more participation by way of equity or control, to carry out any
function;
 Society established by the Central Government or the State Government or a
Local Authority under the Societies Registration Act, 1860 (21 of 1860);
 Public Sector Undertakings
Who is Liable to Deduct TDS-GST

 Is Registration mandatory under GST for persons who are required to deduct TDS?
 Yes, Registration is mandatory for the persons who are required to deduct TDS under GST.
 Non registration may lead to imposition of Penalty of 10,000/- each under IGST/CGST/SGST.
 If a person is already registered under GST law as a Supplier of good or service, is
he still required to take separate registration under GST, for deducting TDS under
GST?
 Yes, a person who is required to deduct tax under GST, shall be required to take a separate
registration, irrespective of the fact that they are separately registered under GST law (Section
24(vi))
 What is the procedure to get registered under GST for a tax deductor?
 Any person required to deduct tax shall e-file application in FORM GST REG-07 on GST portal.
 The Proper Officer, after due verification, may grant registration and issue a Certificate of
Registration in FORM GST REG-06 within 3 working days from the date of submission of
application.
REGISTRATION FOR TDS-GST

 What is the timeline for getting GST Registration done ?
 The application should be made within 30 days from the date he becomes liable to
get himself registered under GST (Section 25(1)).
 As per Notification Number 33/2017 dated 15/09/2017, with effect from
18/09/2017 government has notified the following class of person who are required
to get registered under TDS-GST before 17/10/2017
 A Department or Establishment of the Central or State government
 Local Authority
 An Authority or a Board or any other body, set up by an Act of Parliament or a
State Legislature; or established by any Government, with 51% or more
participation by way of equity or control, to carry out any function;
 Society established by the Central Government or the State Government or a
Local Authority under the Societies Registration Act, 1860 (21 of 1860);
 Public Sector Undertakings

 How will I get registration under GST without having PAN as the registration
procedure under GST is PAN based?
 For the purpose of Registration under GST for TDS deduction, special provisions
has been made, whereby in lieu of Permanent Account Number (PAN), a deductor
may furnish his Tax Deduction and Collection Account Number (TAN) allotted by
incometax department in order to be eligible for grant of registration for TDS-GST.
 Do we have to take a Single Registration in a State or Registration has to be
taken for EACH DDO (Drawing & Disbursing officer) ?
 As per section 25(2), every person shall be granted a single registration in a state
 However as per Form GST REG-07, application for GST-TDS registration, the
application shall contain detail of DDO, and there is no feature to add multiple
DDO.
 It is our personal view that registration should be taken for each DDO rather than a
single registration for each state. Thus GST council should give a clarification on
the same.
gst@asija.in
GST Wing | Asija & Associates LLP

 What is the rate of TDS prescribed under GST?
The rate of TDS prescribed under GST is
 2% of the value of supply in case of IGST
 1% CGST + 1% SGST /UTGST of the value of supply in case of CGST + SGST.
 What is the threshold limit for deducting TDS?
 TDS has to be deducted where the total value of supply, under “a Contract”,
exceeds ₹2.5 lakhs.
 TDS has to be deducted on the supply value , excluding Central Tax, State Tax,
Union Territory Tax, Integrated Tax and Cess indicated in the invoice.
 No deduction under CGST & SGST / UTGST shall be made if the location of the
supplier and the place of supply is in a State or Union territory which is different
from the State or Union territory of registration of the recipient. In that case
IGST TDS will get attracted.
RATE & VALUE OF TDS-GST

 Impact of Short Deduction or No Deduction
 Penalty - In case of Non deduction / short deduction of TDS – GST, the Penalty
shall be higher of the following :-
 Amount by which Tax Not deducted / short deducted or
 10,000/-
RATE & VALUE OF TDS-GST

RATE & VALUE OF TDS-GST – FAQ’s
 I have entered in a Contract amounting to ₹ 5,00,000. The Invoice of ₹ 2,00,000
is issued by the supplier? Am I required to deduct TDS – GST as the Invoice
value is below the threshold limit of 2.5 Lakhs?
 Yes, TDS will have to be deducted,
 For the deduction of TDS, Contract value shall be taken into considered and not
the Invoice value.
 Since the Contract value is more than ₹ 2,50,000 thus TDS – GST has to be
deducted irrespective of the Invoice Value is below the threshold limit.

RATE & VALUE OF TDS-GST– FAQ’s
 I have entered into 4 Contracts at different point of the year with the same
supplier. Each contract amounting to ₹2,00,000 only . Shall I be liable to deduct
TDS as the consolidated value of all contracts exceeds the threshold limit of ₹
2,50,000?
No
 Every person required to deduct TDS, where the total value supplied to him exceeds
₹2,50,000 under “a contract”.
 As there is 4 contracts entered in the above situation. There is no need to deduct TDS
in any of the contract as all the individual contract are below the threshold limit.

Payment of TDS-GST
 What is the due date of payment of tax (TDS-G)?
 The amount of GST deducted in a month shall be paid to the account of government
within 10 days after the end of the month in which deduction is made.
 What is the procedure of deposition the TDS-GST amount to the account of
Government?
 The deductor shall generate a Challan in FORM GST PMT-06 for payment of tax
deducted under GST
 The said amount paid shall be credited to the Electronic Cash Ledger FORM GST
PMT-05 of the deductor.
 Payment of Tax shall be completed on filing of Month GST-TDS Return (Form GSTR-
7), within 10 days after the end of the month in which deduction is made.
 In case of Delay in payment of TDS-GST to government, interest shall be payable @
18% by the deductor

Return under TDS-GST
 Do we have to File any Return of TDS-GST?
 Every registered person who is required to deduct GST shall furnish an e-return in
FORM GSTR-07 within 10 days after the end of the month in which deduction is
made.
 On filing of the said return, the Electronic Liability Register (Form GST PMT-01) of
the deductor shall be debited by the amount of GST TDS Payable of the month.
 The said liability of TDS shall be paid by debiting the electronic Cash Ledger (Form
GST PMT-05) of the deductor. Thus resulting in setting off the liability due to credit
in Electronic Liability Register (Form GST PMT-01) of the deductor.
 Consequence of Defaulting in Filing Return
 Late Filing Fees - In case of late filing of Return, a Ley of Late fee of ₹100 per day
during which such failure continues, subject to a maximum of ₹ 5,000, shall be
payable by the deductor under each of the law IGST/CGST/ SGST.
 Penalty - upto ₹ 20,000, shall be payable by the deductor under each of the law
IGST/CGST/ SGST.

Return under TDS-GST
If any error or omission occurs in a return, can we file a Revised Return?
 No, under GST Law, return can not be Revised but the error can be Rectified in
return of subsequent month in which such error was noticed
 No such rectification of error or omission shall be allowed,
 After furnishing of the return month of September following the end of the
financial year, OR,
 Furnishing of the relevant annual return, whichever is earlier.
What if a person fails to file his return on or before Due date?
 If a person fails to file his return,
 A notice shall be issued to him by the GST Department in FORM GSTR-3A
 Requiring him to furnish such return within 15 days.
 Failure to furnish this information may lead to imposition of penalty of ₹10,000 or
an amount equal to tax evaded, which ever is higher.

Certificate of GST Deducted at Source
 The deductor shall issue to the deductee Certificate of GST Deducted at Source FORM
GSTR-7A
 The said certificate shall be issued with in 5 days from the payment of tax / filing of
GST TDS Return of the month (GSTR-07).
 In case of delay in issuing the Form GSTR-7A, there shall be imposed a late fee on the
deductor of Rs.100/- per day till the default continues. Subject to maximum late fees
of Rs. 5,000/-
 The certificate shall be made available to the deductee electronically on the GST Portal

Refund of Excess or Erroneous Deduction of TDS-GST
 In case of excess or Erroneous Deduction of TDS-GST
 The deductor can make application in FORM GST RFD-01 on common portal within 2 years of
relevant date for claiming refund from his Electronic Cash Ledger (GST PMT-02).
 Provided no refund shall be granted to the deductor, if the amount deducted has been credited to
Electronic Cash Ledger (GST PMT-02) of the deductee.

TDS UNDER VAT VS. TDS UNDER GST: A COMPARISON
PARTICULARS UPVAT GST
Applicability TDS is deducted on Works Contract. TDS is deducted if a contract value
exceeds ₹ 2,50,000.
Registration Registration Application to be filed
within 30 days from the date of
liability in Form VII (Normal Dealers)
and Form VIIG (Government
Department).
Registration Application to be filed
within 30 days from the date of
liability in FORM GST REG-07.
Certificate of registation Certificate of Registration shall be
issued in Form XI within 30 days.
Certificate of Registration shall be
issued in FORM GST REG-06 within 3
working days.
Payment of tax Payment is to be made within 20 days
after the end of a month.
Payment is to be made within 10 days
after the end of a month.

TDS UNDER VAT VS. TDS UNDER GST: A COMPARISON
Particulars UPVAT GST
Return of GST - TDS If the Turnover is upto 25 Lakhs, the return
shall be monthly and shall be filed till 20th of
the succeeding month. If the Turnover is
above than 25 Lakhs, the return shall be
quarterly and shall be filed till 20th of the
month from the end of the relevant quarter.
Return shall be filed on a monthly basis
in FORM GSTR-7 within 10 days of the
succeeding month.
Annual return Annual Return should be filed till 31st October
after the end of the relevant Financial Year.
No Annual Return Required
Certificate of GST - TDS Certificate of TDS shall be issued in Form XIII. Certificate of TDS shall be issued in
FORM GSTR-7A.
Refund of TDS Application to be filed in Form XLIX.
Application should be filed after the end of
the relevant quarter but before 20th of the
succeeding month of the quarter.
 Application to be filed in GST RFD-
01.
 Application should be filed within 2
years of the relevant date.

TDS - GST: Miscellaneous
 I received supply of goods before 1st July, 2017. Invoice was issued at the time of
making supply and there was a provision of TDS deduction under the State VAT Law on
the said supply? I am making payment for the said supply in the month of September.
Should I need to deduct TDS-G on such payment as per GST Law?
No
 Where a supplier has made any sale of goods on which TDS was required to be deducted
under any law of VAT and issued the Invoice before 1st July, 2017.
 No deduction of TDS-G shall be made if the payment is made to the supplier on or after
the appointed day.
 If the rate of GST on the supply on which GST is applicable is 18% and TDS@ 1% is
made at the time of payment, will the effective rate of tax become 19%.
No, GST deducted by the deductor is available to deductee as credit. Therefore, the deductee
will effectively pay tax at only 18% (17% by cash/input tax credit and 1% by utilization of
TDS credit).

THANK YOU
FOR ANY QUERIES KINDLY CONTACT OUR GST TEAM :
ASIJA & ASSOCIATES LLP
CHARTERED ACCOUNTANTS
H.O. : 34/5 , GOKHALE MARG, LUCKNOW
PH. NO. : 0522-4004652,2205072
gst@asija.in
CA Rahul Mishra
Partner
(rahul.mishra@asija.in)
CA Amber Agrawal
Associate Director
(amber.agrawal@asija.in)
CA Ashish Kapoor
Partner
(ashish.kapoor@asija.in)

This Presentation has been prepared to provide a gist of the applicable law
pertaining to GST as issued till date. (03/09/2017)
The provisions of TDS (Section-51) & TCS (Section-52) of CGST Act, 2017 is
not yet applicable by the Government.
For detailed insight and for better understanding of the various provision
of the law, the said presentation should be read along with related
provision of CGST Act, IGST Act, SGST Act & related rules.
We shall not be responsible for any decision taken on the basis of the said
presentation, without obtaining our professional guidance or consultation
on the matter for which reliance was made on this presentation.”
DISCLAIMER

TDS Under GST

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