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TDS under GST

Section 51 of the CGST Act 2017 (Central Goods and Service Tax Act) deals with the process of acceptance of the TDS credit by deductee under GST.

The above provision will be applicable from October 1, 2018.

The above provision will be applicable to the following deductors.

Deductors
a)    Central or state government or any of its department.
b)    Local authority
c)    Governmental agencies
d)    An authority or board or any other body set up by the government or controlled by the government with 51% stake.
e)    The society established by the central or state government or local authority.

Any payment received from the above deductors exceeding Rs.2.5 lakhs will be liable to deduct tax at source at the rate of 1%CGST and 1% SGST. If it falls under IGST then the rate of tax will be 2%

Compliances

1.   The tax deducted at source will need to be paid to the government by the deductor within 10 days of the next month.

2.    The deductor needs to furnish the deductee a certificate of tax paid on behalf of the deductee, clearly mentioning contract value, the rate of deduction, and the amount deducted.

3.    Deductor needs to furnish the certificate within the next 5 days of crediting the amount. If deductor fails to do so, deductor will be in default, and liable to pay the late fee of the sum of Rs. 100/- per day.

4.    The maximum late fees can be levied is Rs. 5000/-

5.    Deductee shall claim the amount for credit in the electronic cash ledger as per section 39.

6.    If the deductor fails to pay the amount of tax deducted to the government then they will be liable to pay the interest as per section 50.

7.    Any refund raised to the deductor or deductee will be processed as per section 54 of the act.

Note – In the above blog all the text used as “The Act” means Central Goods and Service Tax Act, 2017.
The above interpretation is my opinion on the section. For more information, please visit http://www.cbic.gov.in/resources//htdocs-cbec/gst/cgst-act.pdf;jsessionid=D2D34DEF63C64AE3565E7A620A455780

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