Dear Experts,
Kindly clarify whether TDS under GST has to be deducted from the payments made to foreign supplier on a/c of import of goods. The location of foreign supplier is outside India but the place of supply is within India. But as per Section 51 of CGST Act, no deduction shall be made if the location of the supplier and the place of supply is in a State which is different from the State of registration of the recipient. Also, the foreign supplier will not have any GSTIN and hence there is no scope for him to get the refund through elcetronic cash ledger.
Please contribute your inputs on this.
Ashok
TDS Not Applicable on Imports Under GST; IGST Paid via Reverse Charge Mechanism Ensures Full Tax Collection A participant inquired about the applicability of Tax Deducted at Source (TDS) under GST for payments to foreign suppliers for imported goods, noting that the supplier is outside India but the supply occurs within India. Experts clarified that TDS is not applicable on imports, as Integrated GST (IGST) is paid under the Reverse Charge Mechanism (RCM), ensuring full tax collection. TDS provisions apply mainly to domestic supplies to mitigate tax evasion risks. Additionally, supplies under RCM are considered exempt, and no TDS is deducted. The discussion concluded that there is no double taxation issue. (AI Summary)
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