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TDS Provision under the GSTThe salient features of provisions relating to TDS Provision under the GST are elaborate as follows:-

  1. Section 51 of the CGST ACT,2017 empowers the Central Government or any State Government to need any Government department, Local Authority, Government agencies or notified category of persons to deduct tax at one per cent(1%) from the payment made or credited to any supplier of taxable goods or services.
  2. TDS can be levied where the value of supply , under an individual contract ,exceeds Rs 2.50 Lakh. (Individual supplies may be less than Rs. 2,50,000/-, but if contract value is more than Rs. 2,50,000/-, TDS will have to be deducted.) For this purpose tax amount has to be excluded. Means TDS shall not be deducted on the CGST,IGST,or SGST component of Bill of Supply.
  3. When both the supplier as well as the place of supply are different from that of the recipient, no tax deduction at source would be made.
  4. A TDS deductor has to compulsorily register without any threshold limit. The deductor has a privilege of obtaining registration under GST without requiring PAN. He can obtain registration using his Tax Deduction and Collection Account Number (TAN) issued under the Income Tax Act, 1961.
  5. The tax deducted has to be paid to the appropriate government within 10 days from the end of month of deduction. Means The Central Government in case of CGST and IGST and The State Government in case of SGST and The Government of Union Territory in case of UTGST.
  6. The deductor is required to give a TDS certificate to the deductee within 5 days of crediting the amount to the Government ,mentioning there GSTIN, the contract value, rate of deduction, amount deducted, amount paid to the appropriate Government and such particulars as may be prescribed in this behalf. The draft rules on returns provides that TDS certificate will be made available to the deductee in FORM GSTR-7A through GST portal.
  7. Where deductor fails to give certificate to the deductee within five days of payment to the government he will be liable to pay a late fee of Rs 100 per day after the 5th day subject to a maximum of Rs 5,000.
  8. The deductor is also required to file a return in Form GSTR-7 within 10 days from the end of the month. If the supplier is unregistered, name of the supplier rather than GSTIN shall be mentioned in the return.
  9. The details of tax deducted at source furnished by the deductor in FORM GSTR-7 shall be made available to each of the suppliers in Part C of FORM GSTR-2A electronically through the Common Portal and the said supplier may include the same in FORM GSTR-2. The amounts deducted by the deductor get reflected in the GSTR-2 of the supplier (deductee). The supplier can take this amount as credit in his electronic cash register and use the same for payment of tax or any other liability..
  10. Any excess or wrong amount deducted and paid to the Government account shall be dealt for refund under section 54 of the CGST Act, 2017. However, if the deducted amount is already credited to the electronic cash ledger of the supplier, the same shall not be refunded.

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