TDS under GST on Import Transactions

[Ashok Swain]

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

[Yash Jain]

Dear Sir,

On import of goods we pay IGST, (RCM), and not the supplier and hence government is assured of full tax. Also under income tax act, the income is to be charged in accordance with DTAA, and it would not be justice on part of government to exempt income in one law and tax in another law, hence TDS provision per se is not applicable on import of goods and services.

However, the same is not true in domestic scenario, chances of supplier not paying tax is high and hence TDs on domestic supplies only.

TDs deduction (in GST) is applicable only to governments entities only,

Comments from esteemed members is highly solicited

Rgds

[Pavan Mahulkar]

As per section 17(3) of the CGST Act

(3) The value of exempt supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.

Thus in respect of the supplier every supplies attracting RCM is exempt supplies.

As the recipient of the supplies couldn't deduct tax on exempt supplies..

There is no question on deducting Tax on Import or supplies on which the tax is paid on RCM basis

[DR.MARIAPPAN GOVINDARAJAN]

You are not required to recover tax under GST.

[Ashok Swain]

Thank you Experts for the clarification. As the subject is taxed under RCM, there should not be any incidence of additional tax resulting in double taxation. Thanks once again.

AI Summary

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.