K.Vijaya Kumar Asst.Commissioner, Central Tax, Belgaum

1. [Type text]
PREPARED BYK.VIJAYAKUMAR, ASST.COMMISSIONER, C.EXCISE BELGAUM
2017
TAX DEDUCTION
OR COLLECTION
AT SOURCE (TDS or
TCS)UNDER GST
LAW
K . V I J A Y A K U M A R , A S S T . C O M M I S S I O N E R , B E L G A U M

2. K.Vijaya Kumar, Asst.Commissioner, Central Excise, Belgaum.
FOREWORD
Tax collection is the sovereign function of the Governments. It is not
necessary the Govt. itself collect the tax from each and every tax
payer. The Govt. can assign this function to certain specified persons
under certain circumstances with due safeguards.
Under GST Law, not all persons are liable to be “registered” but
certain category of persons is required to be registered under GST
Law (Sec.24).
GST Law stipulates that two categories of persons, among others, are
required to deduct or collect tax at source as per provisions under
Section 51 and 52 of the CGST Act respectively.
Thus, these persons can be called as Tax Deductors at Source (TDS)
and Tax Collectors at Source (TCS)for the sake of convenience.
Now, let us get similar with, and understand these provisions under
GST Law under the present discussion.

3. K.Vijaya Kumar, Asst.Commissioner, Central Excise, Belgaum.
Tax deduction at source. (sec.51)
It may be noted that the Government may mandate certain category of
persons (“the deductor”) to deduct tax at the rate of one per cent. from the
payment made or credited to the supplier (“the deductee”) of taxable goods or
services or both, where the total value of suchsupply, under a contract,
exceeds two lakh and fifty thousand rupees.
Therefore, the deductor is required to deduct 1% of consideration (amount
paid or credited to the supplier) when the total supply under a contract
exceeds Rs.2,50,000/-.
Who are the persons mandated for this job ?
The Government may mandate the following persons as “Tax Deductors at
Source”:
 a department or establishment of the Central or StateGovernment; or
 local authority; or
 Governmental agencies; or
 such persons or category of persons as may be notified by the
Governmenton the recommendations of the Council,
Location of the supplier (deductee) and place of supply
must be within the same state or UT.
It is to be noted that no deduction shall be made if the location of the supplier
and the placeof supply is in a State or Union territory which is different from
the State or Union territory of registration of the recipient.

4. K.Vijaya Kumar, Asst.Commissioner, Central Excise, Belgaum.
Value of supply or consideration must be exclusive of
Taxes (Explanation)
For the purpose of deduction of tax (TDS), the value ofsupply shall be taken as
the amount excluding the central tax, State tax, Union territory tax,
integrated tax and cess indicated in the invoice.
Due date payment of tax by the Tax deductor
BY
10th
The amount deducted as tax shall be paid to the Government bythe deductor
within ten days after the end of the month in which such deduction is made,
insuch manner as may be prescribed.
Furnishing of a certificate to deductee by the deductor
The deductor shall furnish to the deductee a certificate mentioning therein
the contract value, rate of deduction, amount deducted, amount paid to the
Government andsuch other particulars in such manner as may be prescribed.
If Certificate is not issued within five days of crediting
the amount by the deductor ?
Thedeductor shall pay, by way of a late fee, a sum of one hundred rupees per
day from the dayafter the expiry of such five days period until the failure is
rectified, subject to a maximumamount of five thousand rupees.

5. K.Vijaya Kumar, Asst.Commissioner, Central Excise, Belgaum.
Can a deductee claim Credit of TDS ?
The deductee shall claim credit, in his electronic cash ledger, of the tax
deductedand reflected in the return of the deductor furnished under sub-
section (3) of section 39, insuch manner as may be prescribed.
The details of tax deducted at source furnished by the deductor in FORM
GSTR-7shall be made available to the deductee in Part C of FORM GSTR-2A
electronically through the Common Portal and the said deductee may include
the same in FORM GSTR-2 (Inward supply return).
Deductee has to pay interest, if fails pay the amount deducted.
If any deductor fails to pay to the Government the amount deducted as tax, he
shall pay interest (section 50) in addition to the amount of tax deducted.
Recovery shall be made under the provisions Sec 73 or 74 if any default.
Refund of excess or erroneous amount deducted.
Deductor or deductee, if any excess or erroneous deduction, are eligible for
refund as provided under Section 54.
However, no refund to the deductor shall be granted, if the amount deducted
has been credited to the electronic cash ledger of the deductee.
Failure to pay amount deducted or short deducted or not
deducted.
It is worth mentioning that the failure to deduct the
tax or deducts an amount which is less than the
amount required to be deducted or where he fails to
pay the amount deducted to the Government as
provided under GST Law is an offence - Sec.122 (1).
The deductor shall be liable to pay a penalty of ten thousand rupees or an
amount equivalent to the taxnot deducted or short deducted or deducted but
not paidto the Government whichever is higher.

6. K.Vijaya Kumar, Asst.Commissioner, Central Excise, Belgaum.
Tax collected at Source (Sec.52)
Every electroniccommerce operator (“e-commerce operator”), not being
anagent, shall collect an amount calculated at such rate not exceeding one per
cent. of the net value of taxable supplies made through it by other suppliers
where the consideration with respect tosuch supplies is to be collected by the
operator.
What is net value of taxable supplies ?
The expression “net value oftaxable supplies” shall mean the aggregate value
of taxable supplies of goods or services orboth, other than services notified under
sub-section (5) of section 9, made during any monthby all registered persons
through the operator reduced by the aggregate value of taxablesupplies
returned to the suppliers during the said month.
Therefore, the returned supplies are not part of net value of taxable supplies.
Due date of paying tax collected by the operaror.
BY
10th
The amount collected shall be paid to the Government by theoperator within
ten days after the end of the month in which such collection is made, in
suchmanner as may be prescribed

7. K.Vijaya Kumar, Asst.Commissioner, Central Excise, Belgaum.
Furnishing of a statement by the operator (TCS).
Every operator who collects the amount shall furnish a statement,
electronically, containing the details of outward supplies of goods or services
orboth effected through it, including the supplies of goods or services or both
returned throughit, and the amount collected during a month, in such form
and manneras may be prescribed, within ten days after the end of such
month.
Filing of annual statement by the Operator.
BY
31st
Dec.
Every operator who collects the amount shall furnishan annual statement,
electronically, details of the amount collected during the financialyear, before
the thirty first day of Decemberfollowing the end of such financial year.
Sharing the details with the supplier.
The details of tax collected at source furnished by an e-commerce operator
under section 52 in FORM GSTR-8 shall be made available to the concerned
person in Part D of FORM GSTR - 2A electronically through the Common Portal
and such taxable person may include the same in FORM GSTR-2.

8. K.Vijaya Kumar, Asst.Commissioner, Central Excise, Belgaum.
Rectification of mistake in a statement by the operator.
If any operator after furnishing a statement (monthly) discovers anyomission
or incorrect particulars therein he shall rectify such omission or incorrect
particulars in the statement to be furnished for the month during which such
omissionor incorrect particulars are noticed, subject to payment of interest
under sec. of section 50.
However, this mistake could not be a result of scrutiny, audit, inspection or
enforcement activity by the tax authorities
No such rectification of any omission or incorrect particulars shall beallowed after
the due date for furnishing of statement for the month of September following the
end of the financial year.
Claim of credit, and matching of details in the returns.
The supplier who has supplied the goods or services or both through the
operatorshall claim credit, in his electronic cash ledger, of the amount
collected and reflected in thestatement of the operator.
The details of supplies furnished by every operator shall be matched with the
corresponding details of outward supplies furnished by the concernedsupplier
registered under this Act. If details do not match with the corresponding
details the discrepancy shall be communicated to both persons.

9. K.Vijaya Kumar, Asst.Commissioner, Central Excise, Belgaum.
Notice to the Operator for furnishing certain details
by the Tax Authorities.
The Deputy Commissioner may serve a notice,either before or during the
course of any proceedings under this Act, requiring the operatorto furnish such
details relating to—
 supplies of goods or services or both effected through such operator
duringany period; or
 stock of goods held by the suppliers making supplies through such
operator in the godowns or warehouses….
Penalty upto Rs.25,000/-for not furnishing information.
Every operator on whom a notice has been served shallfurnish the required
information within fifteen working days . If he fails, be liable to a penalty which
may extend to twenty-five thousand rupees.
Offence and penalty
If the Operator fails to collect tax in accordance with the GST law or collects an
amount which is less than the amount required to be collectedor where he
fails to pay the amount so collected to the Government.
The operator shall be liable to pay a penalty of ten thousand rupees or tax not
collected under section 52 or short collected or collected butnot paid to the
Government, whichever is higher.
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