TDS under GST

[Durga Prasad]

Dear Sir,

Please Explain TDS Applicability for the Following Queries

1. Advance Amount Which is paid prior to 1 Oct for a Contract pertaining to on or after 1 Oct

2. Amount paid by way of Book Adjustments

3. If Out of Consideration say 10 Lakhs 9 Lakhs was received before 1 oct and balance was received on or after 1 Oct. Whether TDS shall be deducted on the 1 Lakh if Yes, then why we are deducting the TDS though it doesn't exceed threshold limit.

[DR.MARIAPPAN GOVINDARAJAN]

TDS under GST is to be done by only Government authorities. Whether you are coming under this category?

[CA Karan]

GST council has published the SOP on TDS. as per this document, the following transactions will not be liable to GST:

a) Where the payment relates to a tax invoice that has been issued before 01.10.2018.

b) Where any amount was paid in advance prior to 01.10.2018 and the tax invoice has been issued on or after 01.10.18, to the extent of advance payment made before 01.10.2018.

your 1st and 3rd query is answered accordingly.

regarding the second one, the book adjustment is a valid mode of payment and there is no restriction under TDS provisions for any mode of payment. thus, TDS will apply.

[Durga Prasad]

Thank you so much Sir,

As you told GST Council had issued SOP, If you Don't mind could you share link of the same.

[Ganeshan Kalyani]

I agree with Sri Mariappan Sir's reply.

AI Summary

TDS under GST: advance payments made before October first exempt to extent; book adjustments count as payment, TDS applies. TDS under GST applies only where the payer is a government authority required to deduct. The SOP exempts amounts relating to invoices issued before 01.10.2018 and advance payments made prior to 01.10.2018 (even if invoiced later) to the extent of those advances. Amounts received on or after the cut-off not covered by the advance exemption are subject to TDS when a government deductor is involved. Book adjustments are a valid mode of payment and are subject to TDS where deduction obligations exist.