Tax Deducted at Source under GST Act

1. TDS UNDER GST ACT
Suresh Gajari

2. SCOPE / OBJECTIVE
• Who are liable to deduct TDS under GST
• When will the liability to deduct TDS be attracted
• Nature of TDS & Its Rate
• How to calculate TDS
• TDS Registration
• Due date for payment of TDS to Govt
• Refund of TDS to deductee

3. WHO ARE LIABLE TO DEDUCT
TDS UNDER GST
• As per section 51(1) of CGST Act,2017, The following persons are liable to deduct TDS under GST Act,
• A department or establishment of the central govt or state govt; or
• Local authority; or
• Government agencies; or
• Such persons or category of persons as may be notified by the government. (Notification on 13th Sep 2018)
• 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 owned by the government.
• 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.
• Public Sector Undertakings

4. WHEN WILL THE LIABILITY TO
DEDUCT TDS BE ATTRACTED
• The deductor is liable to deduct tax, where the total value of taxable supply, under a contract,
exceeds Rs.2,50,000/-.
• For the above purpose, value of supply excludes Central tax, State tax, UT tax, Integrated tax
& Cess.
• Under a contract, Taxable supply – 2,00,000 and Exempted supply – 1,00,000 In this situation
the person is not liable to deduct because value of taxable supply is not exceeding Rs.
2,50,000/-.

5. NATURE OF TDS & ITS RATE
Name of Supply Name of TDS Rate of Tax
Location of the supplier & Place of
supply is in the same state / UT
without any legislature.
CGST 1%
SGST 1%
Location of the supplier & Place of
supply is in the different states.
IGST 2%

6. HOW TO CALCULATE TDS
AMOUNT
• Invoice value = 3,54,000 (Inclusive of GST @ 18%)
• Invoice value (Excluding GST) = 3,54,000*100/118 = 3,00,000
• IGST = 54,000
• TDS under GST= 3,00,000 * 2% = 6,000 (2% on payment made to supplier not on GST
Amount)
• Deductee can claim refund of Rs.6,000.
• Deductor can claim ITC of Rs. 54,000.

7. REGISTRATION
• A person who is liable to deduct TDS has to compulsorily register whether or not seperately
registered under this act and there is no threshold limit for this. (Section 24(2))
• The registration under GST can be obtained without PAN and by using the existing TAN
issued under the income tax act.
• TAN is mandatory.

8. DUE DATE FOR PAYMENT OF
TDS
• The amount deducted tax under this act shall be paid to the government by the deductor
within 10 Days from the end of the month in which such deduction made. (Section 51(2)).
• Due date for filing return i.e., GSTR 7 is 10th of every next month in a particular tax period.
• If the deductor fails to pay with in due date, he shall pay interest @ 18% in accordance with
50(1) of CGST Act.

9. TDS CERTIFICATE
• The deductor shall furnish TDS certificate to the Deductee within 5Days of crediting the
amount so deducted to the government. (Section 51(3) & (4))
• Example:
• Actual transaction date: 03/10/2018
• TDS deducted: 03/10/2018
• TDS paid to govt on: 07/11/2018 (Due date – 10/11/2018)
• Then TDS Certificate shall furnish within 12/11/2018.

10. REFUND OF TDS TO DEDUCTEE
• The deductee shall claim credit, in his credit ledger, of the tax deducted and reflected in the
return of the deductor furnished under section 39(3).
• The deductor can clain ITC of total GST amount.