Tax Deducted At Source (TDS) Under GST

 In this article, we will give you a detailed overview of TDS Under Goods and Services Tax (GST)-All You Need To Know and the process for carrying out TDS-related activities as well. Here you will know more about Tax Deducted At Source (TDS) Under GST – All You Need To Know.

In GST, under the Income Tax Act, TDS is distinct from TDS. In other words, separate TDS payments, separate returns, and separate certificates for TDS are required. Section 51 of the CGST Act , 2017, lays down rules in relation to TDS payments under GST. The Goods and Services Tax, usually referred to as the GST, is a single system of indirect taxation in which many taxes, such as the Excise Duty, the Customs Duty, the Service Tax, and the Value Added Tax ( VAT), have been brought under one roof. However, the revised GST regime also divided the tax structure of the country into three types: CGST (Central Tax on Goods and Services), SGST (State Tax on Goods and Services), and IGST (Integrated Tax on Goods and Services).

What Is TDS Under GST?

Tax Deducted at Source (TDS) is typically one of the tax collection strategies and is entirely based on a certain proportion of the amount owed to the seller by the receiver for the purchase of goods or services, or both. Paid tax is the revenue of the government.

The TDS is somewhat different from the Income Tax TDS under GST. The terms of the GST TDS have become valid as of 1 October 2018 (Notification No. 50/2018 dated 13 September 2018). If a transaction is protected by both the GST and the Income Tax Act, separate deductions may be made, separate returns may be issued and, under the respective Acts, separate TDS certificates may be issued.

Who Can Deduct TDS Under GST?

• A department or institution of the central government or of the government of the state; or

• Local government; or a local authority

• Agencies of government; or

• Those individuals or groups of persons may be notified by the Government

Who can deduct TDS under GST?

Recipients of products or services known as deducers who enter into a contract with a supplier for taxable goods or services with a value greater than Rs 2,50 Lakhs shall deduct TDS from the tax invoice of such suppliers.

For such taxable goods or services, the taxable quantity of goods or services, with the exception of the GST part, is charged under this TDS. In other words, if the individual supplies were maybe lower than Rs 2.50 Lakhs, but the taxable value of the goods or services exceeded Rs 2.50 Lakhs, TDS would be deducted.

In order to deduct TDS from the tax invoice of the supplier of taxable goods and services, there are also certain requirements that need to be fulfilled. Those are as follows.

When TDS Is Not Deducted?

• If, under the contract, the total amount of the taxable supply is less than or equal to Rs 2,50 Lakhs.

• For both taxable and excluded supplies, the overall contract value exceeds Rs 2.50 lakhs. However, under such a contract, the amount of the taxable supply is less than or equal to Rs 2,50 lakhs.

• Where, as specified by GST law, the recipient provides exempted services.

• As specified under the GST Rule, the recipient receives exempted products.

• Cases in which a supplier/deductee submitted an invoice for the selling of products for which TDS was to be deducted before 1 July 2017 under the VAT Rule. The payment for such a sale is, however, made on or after 1 July 2017.

• Where the location of the supplier and the place of supply are registered in a State or UT other than the State or UT in which the receiver/deductor is registered.

• Where the contract involves activities or transactions which, irrespective of their importance, are included in Schedule III of the CGST / SGST Acts.

• Cases in which the bill to be paid to the supplier applies to the tax invoice given prior to 1 October 2018.

• In cases where the advance amount was paid before October 1, 2018, and on or after October 1, 2018, the tax invoice was released. TDS would also not be deducted to the extent of the advance payment made prior to the first of October 2018.

•  

TDS Registration Criteria For TDS Deductors

An person or business entity that is responsible for deducting TDS is required to report, which is necessary. However, there may not be a threshold limit for this. Instead of using the current Tax Deduction and Collection Account Number (TAN) issued under the Income Tax Act, registration under GST can be carried out without the need for details of the PAN (Permanent Account Number). It can also be argued that getting one's TAN data is mandatory.