TaxTMI 
TaxTMI 
TaxTMI 
Standard Operating Procedure on TDS under GST
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....tandard Operating Procedure on TDS under GST <br>GST<br>Dated:- 29-9-2018<br><BR>PDF DOWNLOAD ============= Document 1GST NATION TAX MARKET STANDARD OPERATING PROCEDURE TDS 家 under GST A ready reckoner for DDOS / other Deductors in GST Law Committee GST Council 28th September 2018 Contents 1. Introduction.. 2. Relevant provisions of TDS in GST and effective date 2.1 Provisions of Law ...... 4 .................. 5 5 5 2.2 Effective date ......... 2.3 Brief Diagrammatic representation of the TDS provisions in GST...…………………………. 6 2.4 Concept of Supply in GST.......... 3. When tax deduction is required to be made in GST......... 3.1 Conditions for & amount of deduction 4. When tax deduction is not required to be made in GST........ 5. Illustrations of various situations requiring deduction of tax....... ... 7 8 8 9 11 6. Valuation of supply for deduction of TDS and applicable rates with illustrations....... 6.1 Rate of deduction of tax ........ 14 ... 14 6.2 Illustration of various situations requiring determination of value of supply for deduction of tax. 15 ... 6.2.1 Supplier is registered and contract value is excludi....
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....ng GST …………………………….. 15 ........... 6.2.2 Supplier is registered and contract value is inclusive of GST ....... 6.2.3 Supplier is registered under composition scheme........ ...... 15 16 ......... 7. Persons liable to deduct tax under GST Law.. ............ 8. Registration of deductor of tax in GST ..... 16 ............ ....... 17 8.1 Step by step process of registration of TDS deductors in GST ………………………………………….. 17 2 9. Payment of TDS (provisions and procedure)..... ....... 9.1 Challan generation for depositing the deducted tax. 10. TDS return....……………………………. 23 ...... 22 23 24 24 10.1 TDS return submission procedure........ 10.2 Time limit for filing the TDS Returns under GST ....... 24 11. Benefit of TDS to deductee and TDS certificate......... 12. Late fee, interest and penalty.. 13. 14. Legal References….... Frequently asked questions (FAQs)......... 3 25 ....... 25 26 27 1. Introduction: The concept of Tax Deduction at Source (TDS) was there in t....
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....he erstwhile VAT Laws. GST Law also mandates Tax Deduction at Source (TDS) vide Section 51 of the CGST/SGST Act 2017, Section 20 of the IGST Act, 2017 and Section 21 of the UTGST Act, 2017. GST Council in its 28th meeting held on 21.07.2018 recommended the introduction of TDS from 01.10.2018. Following would be the deductors of tax in GST under section 51 of the CGST Act, 2017 read with notification No. 33/2017-Central Tax dated 15.09.2017: (a) a department or establishment of the Central Government or State Government; or (b) local authority; or (c) Governmental agencies; or (d) an authority or a board or any other body,- (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with fifty-one per cent. or more participation by way of equity or control, to carry out any function; or (e) a society established by the Central Government or the State. Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860); or (f) public sector undertakings. 4 The procedures of TDS along with related legal provisions are discussed herein below for the understanding of the stakeholders including the Drawing and Disbursement Officer....
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....s (DDOS) who are required to deduct tax in accordance with the provisions of the GST Laws. 2. Relevant provisions of TDS in GST and effective date: 2.1 Provisions of Law: GST Laws provide for tax deduction at source (TDS) by the specified category of persons (herein after referred to as 'the deductor') from the payment made or credited to the supplier of taxable goods or services or both (herein after referred to as 'the deductee') at a prescribed rate. 2.2 Effective date: Notification No. 33/2017 - Central Tax dated 15.09.2017 was issued by the CBIC to enable registration of tax deductors. However, Government suspended the applicability of TDS till 30.09.2018. Now, it has been decided that the TDS provision would be made operative with effect from 01.10.2018. Notification No. 50/2018- Central Tax dated 13.09.2018 has already been issued in this regard by CBIC. Similar notifications have been issued by respective State Governments. 5 2.3 Brief Diagrammatic presentation of the TDS provisions in GST: Deductor is required to take registration [Sec 24(vi)] Registration to be done through the common portal www.gst.gov.in by using PAN/TAN Enters into Contract for of purchase taxable good....
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....s / services or both with any supplier Total Value of taxable supply under a contract (excluding GST) >Rs.2.5L → Deduct tax from payment Total Value of taxable supply under a contract (excluding GST) Rs.2.5 Lakh under a single contract. This value shall exclude taxes & cess leviable under GST. b. If the contract is made for both taxable supply and exempted supply, deduction will be made if the total value of taxable supply in the contract > Rs.2.5 Lakh. This value shall exclude 8 taxes & cess leviable under GST. c. Where the location of the supplier and the place of supply are in the same State/UT, it is an intra-State supply and TDS @ 1% each under CGST Act and SGST/UTGST Act is to be deducted if the deductor is registered in that State or Union territory without legislature. d. Where the location of the supplier is in State A and the place of supply is in State or Union territory without legislature - B, it is an inter-State supply and TDS @ 2% under IGST Act is to be deducted if the deductor is registered in State or Union territory without legislature - B. e. Where the location of the supplier is in State A and the place of supply is in State or Union territory without l....
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....egislature B, it is an inter-State supply and TDS @ 2% under IGST Act is to be deducted if the deductor is registered in State A. f. When advance is paid to a supplier on or after 01.10.2018 to a supplier for supply of taxable goods or services or both. 4. When tax deduction is not required to be made under GST: Tax deduction is not required in following situations: a) Total value of taxable supply ≤ Rs. 2.5 Lakh under a contract. b) Contract value > Rs. 2.5 Lakh for both taxable supply and exempted supply, but the value of taxable supply under the said contract ≤ Rs. 2.5 Lakh. c) Receipt of services which are exempted. For example services 9 exempted under notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 as amended from time to time. d) Receipt of goods which are exempted. For example goods exempted under notification No. 2/2017 - Central Tax (Rate) dated 28.06.2017 as amended from time to time. e) Goods on which GST is not leviable. For example petrol, diesel, petroleum crude, natural gas, aviation turbine fuel (ATF) and alcohol for human consumption. f) Where a supplier had issued an invoice for any sale of goods in respect of which tax was required to ....
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....be deducted at source under the VAT Law before 01.07.2017, but where payment for such sale is made on or after 01.07.2017 [Section 142(13) refers]. g) Where the location of the supplier and place of supply is in a State(s)/UT(s) which is different from the State / UT where the deductor is registered. h) All activities or transactions specified in Schedule III of the CGST/SGST Acts 2017, irrespective of the value. i) Where the payment relates to a tax invoice that has been issued before 01.10.2018. j) 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. k) Where the tax is to be paid on reverse charge by the recipient i.e. the deductee. 1) Where the payment is made to an unregistered supplier. m) Where the payment relates to "Cess" component. 10 5. Illustrations of various situations requiring deduction of tax: Situations / Contracts Deduction required Remarks YES/NO Finance Department is making a payment of Rs.3 Lakh to a supplier of 'printing & stationery'. Education Department is making payment of Rs.5 Lakh to a supplier of 'printed books and printed or illustrat....
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....ed post cards' where payment for books is Rs.2 Lakh and Rs.3 Lakh is for other printed or illustrated post cards. Finance Department, is making payment of Rs.1.5 Lakh to a supplier of 'car rental service'. Yes Yes, deduction is required in respect of payment of Rs. 3 Lakh only i.e. for payment in respect of taxable supply. See Remarks Where the total contract value of taxable supply is more than Rs.2.5 Lakh deduction is mandatory. Books are exempted goods; no deduction is required in respect of supply of books. However, payment involving 'printed or illustrated post cards' is for supply of taxable goods and value of such supply is > Rs.2.5 Lakh; so deduction is required. Deduction is mandatory in case the total value of taxable supply under the contract > Rs.2.5 Lakh irrespective of the amount paid. However, if the total value of supply under a contract is Returns > Returns Dashboard. Q41 Is there any Offline Tool for filing Form GSTR-7? A. Yes. FORM GSTR 7 return can be filed through offline mode also. Q42 Can the date of filing of FORM GSTR-7 be extended? A. Yes, date of filing of FORM GSTR-7 can be extended by the Commissioner of State/Central tax through notification. 33 33 Q43....
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.... What are the pre-conditions for filing FORM GSTR-7? A. Pre-conditions for filing of FORM GSTR-7 are: • Tax Deductor should be registered and should have a valid/active GSTIN. • Tax Deductor should have a valid User ID and password. • • Tax Deductor should have an active & non-expired/ non-revoked digital signature (DSC) in case return is to be filed through DSC. Tax Deductor has made payment or credited the amount to the supplier's account. Q44 What are the modes of signing FORM GSTR-7? A. FORM GSTR-7 can be filed using DSC or EVC. Q45 Can I preview the FORM GSTR-7 before filing? A. Yes, the preview of FORM GSTR-7 can be seen by clicking on ‘Preview Draft GSTR-7' before filing on the GST Portal. Q46 What happens after FORM GSTR-7 is filed? A. After FORM GSTR-7 is filed: • ARN is generated on successful filing of the return in FORM GSTR-7. An SMS and an email are sent to the applicant on his registered mobile and email id. Q47 Can I file the complete FORM GSTR-7 using Offline Utility? A. No. Filing can take place only online on the GST Portal. The details of Table 3 and Table 4 can be prepared offline but remaining activities like payment and fil....
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....ing has to be completed on the portal only. Once the json file is uploaded on the GST Portal, one may continue to proceed to file. Liabilities will then be computed and after making payment, return can be filed. Q48 What are the features of FORM GSTR-7 Offline Utility? A. The key features of FORM GSTR-7 Offline Utility are: Q49 • The FORM GSTR-7 details of Table 3 and 4 can be prepared offline, with no connection to Internet. • Most of the data entry and business validations are in built in the offline utility, reducing errors upon upload to GST Portal. From where can I download and use the FORM GSTR-7 Offline Utility in my system? A. Following steps are required to be performed to download and open the FORM GSTR-7 Offline Utility in your system from the GST Portal: 1. Access the GST Portal:www.gst.gov.in. 2. Go to Downloads > Offline Tools > GSTR7 Offline Utility option and click on it. 34 3. Unzip the downloaded Zip file which contain GSTR7_Offline_Utility.xls excel sheet. 4. Open the GSTR7_Offline_Utility.xls excel sheet by double clicking on it. 5. Read the ‘Read Me' instructions on excel sheet and then fill the worksheet accordingly. Q50 Do I need to login to....
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.... GST Portal to download the FORM GSTR-7 Offline Utility? A. No. One can download the FORM GSTR-7 Offline Utility under 'Download' section without logging in to the GST Portal. Q51 A. Q52 Do I need to login to GST Portal to upload the generated JSON file using FORM GSTR-7 Offline Utility? Yes. You must login in to the GST Portal to upload the generated JSON file using FORM GSTR-7 Offline Utility. What are the basic system requirements/ configurations required to use FORM GSTR-7 Offline Tool? A. The offline functions work best on Windows 7 and above and MS EXCEL 2007 and above. Q53 Is Offline utility mobile compatible? A. As of now FORM GSTR-7 Offline utility cannot be used on mobile. It can only be used on desktop/laptops. Q54 How many TDS details of the suppliers can I enter in the offline utility? A. One can enter maximum 10,000 rows of TDS details of the suppliers in the offline utility. I am a tax deductor. I've made payment for four different products to one of my Q55 suppliers. Shall I report each payment in four different rows of the offline utility? A. No. Row with a duplicate GSTIN is not allowed in the utility. One should report the whole amount in one row only. All the pa....
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....yments are required to be added and one single consolidated amount has to be entered in the “Amount paid to deductee on which tax is deducted" column. Q56 I have mistakenly entered rows with the same GSTIN. Should I use the "Delete" option from the dropdown of "Action" column to delete these rows? A. No, the incorrect data has to be deleted in the utility manually using the "Delete" button of the keyboard. Add and Delete options of the "Action" column are meant for adding or deleting data in the GST portal. Delete option is required to be ignored while preparing FORM GSTR-7 for first-time upload, and for the subsequent uploads it can be used only to delete those particular rows from the already-uploaded data on the portal. 35 Q57 Can I enter negative or decimal amounts in the offline utility? A. No, any negative value cannot be entered in the utility. However, decimal values can be entered. All decimal values would be rounded off to two decimal places. But, total liability will be rounded off to whole number. Q58 I've uploaded GSTR-7 JSON File and it was processed without error. Do I need to download the generated file? A. No, it is not necessary to download the GSTR-7 JSON F....
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....ile processed without error. One can download it only if he wants to update, add or delete the details added previously. One can download the uploaded file for record if so required. Q59 Interest, Penalty & Late Fee Mr A, a DDO has submitted return for the month of November upon payment of liability as shown in such return on 11.12.2018. Is he liable to pay interest? A. Mr. A has to pay interest for one day as return is to be filed by 10 th December, 2018. Q60 Mr X has deducted Rs 1 lakh of TDS in Nov'18. He deposits Rs 70,000/- on 10.12.2018 & the rest of Rs 30,000 on 30.01.2019. He submits the return in FORM GSTR 7 on 28.02.2019. Has he incurred any liability to pay late fee or interest? Is he liable to pay any penalty? A. Electronic Cash Ledger of the DDO is credited on 10.12.2018 and 30.01.2019 with Rs. 70,000/- and Rs. 30, 000/- respectively on account of deposit of TDS of Rs 70,000/- on 10.12.2018 & Rs 30,000 on 30.01.2019. Since return in FORM GSTR 7 for the month of November, 2018 is filed on 28.02.2019 and he discharges his payment liability of tax so deducted by debiting his electronic cash ledger as well on this date only, therefore, late fee of 80 days (11.12.2018 to 28....
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.....02.2019) have to be paid under CGST and SGST. The amount of late fee will be restricted to Rs. 5000/- (upper limit provided in the Act). Interest has also to be paid for the delay. Penalty is also payable by a DDO if he fails to deduct the tax in accordance with the provisions of sub-section (1) of section 51, or deducts an amount which is less than the amount required to be deducted under the said sub-section, or where he fails to pay to the Government under sub-section (2) of section 51 [section 122(v) refers]. He is liable to penalty of Rs.1,00,000/-. 36 36 TDS Certificate &Benefit of TDS to the deductee As a DDO I have deducted tax while making payment to various Vendors. I have Q61 deposited the amount in the appropriate Government A/c & also filed return within stipulated time. Have I discharged all my liabilities relating to TDS? A. No. A system generated TDS certificate in FORM GSTR-7A mentioning therein the value on which tax is deducted, and amount of tax deducted and other related particulars shall be available for download from the portal by deductee. Q62 How can a supplier download the TDS certificate in FORM GSTR 7A? A. TDS certificate can be downloaded by access the....
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.... www.gst.gov.in URL and using the following path: Login to the GST Portal with valid credentials. Navigate to Services > User Services > View/Download Certificates option. Q63 How many TDS Certificates are issued per GSTIN? A. A single TDS certificate is issued per GSTIN per FORM GSTR-7 return filed by deductor. Q64 Is the signature of Tax Deductor required in TDS Certificate? A. FORM GSTR-7A is system generated TDS certificate; signature of Tax Deductor is not required. Q65 Do I as a taxpayer have to file FORM GSTR-7A? A. No, a tax payer (deductee) is not required to file FORM GSTR-7A. Q66 Can I as a taxpayer (Deductor or Deductee) download and keep a copy of my TDS Certificate for future reference? A. Yes, TDS Certificate can be viewed and/or downloaded in post-login mode on the GST portal. Q67 Being a deductor do I have to fill any form to generate FORM GSTR 7A? How can I view Form GSTR-7A? A. No, a deductor is not required to fill up any separate form for generation of FORM GSTR- 7A. FORM GSTR 7A shall be generated if return in FORM GSTR 7 is filed. To view Form GSTR-7A, perform following steps: 1. Access the www.gst.gov.inURL. The GST Home page is displayed. 2. Login to the GS....
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....T Portal with valid credentials. 3. Click the Services > User Services > View/Download Certificates command. Disclaimer: This Standard Operating Procedure (SOP) is clarificatory in nature and is not meant for legal interpretation of provisions of relevant Acts and rules. 37<BR> News - Press release - PIB....