CENTRAL BOARD OF EXCISE & CUSTOMS. Hauzel Daniel Superintendent GST Shillong Division I

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1 Hauzel Daniel Superintendent GST Shillong Division I

2 Tax Deduction at Source (TDS) is a system, initially introduced by the Income Tax Department. It is one of the modes/methods to collect tax, under which, certain percentage of amount is deducted by arecipient at the time of making payment to the supplier.

3 Who is a Tax Deductor? A department or an establishment of the Central Government or State Government; or Local authority; or Governmental agencies; or Such persons or category of persons as may be notified by the Government on the recommendations of the Council.

4 When to deduct tax at source? DDO is liable to deduct tax from the payment of the supplier when the total value of supply of good / services or both under a Contract, payable to the Supplier exceeds Rs.2.5 lakhs

5 Rate of Tax for deduction of tax at source For intra-state supply: 1% as CGST & 1% as SGST (both to be deducted) For inter state supply: 2% IGST (In place of CGST & SGST)

6 Determination of value of supply

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8 Determination of value of supply 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. Supplier, place of supply and recipient - in the same state : supply (CGST & SGST) Intra-State Supplier & place of supply - in different states: Inter-State supply (IGST) Supplier & place of supply in State A - recipient in State B: The supply would be intra-state supply (CGST & SGST leviable) But transfer of TDS (CGST & SGST of State B) to the cash ledger of the supplier (CGST & SGST of Statet A) would be difficult. So in such cases, TDS would not be deducted. Hence, when both the supplier as well as the place of supply are Hence, when both the supplier as well as the place of supply are different from that of the recipient, no tax deduction at source would be made.

9 Registration as Tax Deductor

10 Registration as Tax Deductor A TDS Deductor has to compulsorily register without any threshold limit.

11 Registration Procedure for Tax Deductor

12 Digital Signature Certificate (DSC) The GST Portal accepts any Class II or Class III PAN based DSC issued by an Indian Certifying Authority Signing gusing DSC is not supported on mobile devices To know more about the System Requirements for DSC, check the link

13 Digital Signature Certificate (DSC) Class II DSC Issued for both business personnel and private individuals use These certificates confirm that the information in the application provided by the subscriber does not conflict with the information in well recognized consumer databases. Class III DSC Issued to individuals as well as organizations Primarily intended for e commerce applications, they are issued to individuals only on their personal (physical) appearance before the Certifying Authorities

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17 TDS Return online submission The Deductor is required to file a return in Form GSTR-7 within 10 days from the end of the month. If the supplier is unregistered, name of the supplier rather than GSTIN shall be mentioned in the return. The details of tax deducted in FORM GSTR-7 shall be made available to each of the suppliers in Part C of FORM GSTR-2A electronically through the Common Portal after the due date of filing of Form GSTR-7.

18 TDS Return online submission The amounts deducted by the Deductor get reflected in the GSTR-2 of the supplier (Deductee). The supplier can take this amount as credit in his electronic cash register and use the same for payment of tax or any other liability.

19 TDS Certificate Issuance of A TDS certificate is required to be issued by Deductor in Form GSTR-7A to the Deductee (the supplier), within 5 days of crediting the amount to the Government (If deducted d d on 12/08/2017, TDS to be paid before 10/09/2017) Failure to issue Certificate, the Deductor would be liable to pay a late fee of Rs. 100/- per day from the expiry of the 5th day till the certificate is issued, subject to maximum of Rs. 5000/-.

20 Consequences of not complyingwith TDS provisions Event TDS not deducted Consequences Interest to be paid along with the TDS amount; else the amount shall be determined and recovered as per the law

21 Consequences of not complyingwith TDS provisions Event TDS not deducted TDS certificate not issued or delayed beyond the prescribed period of five days Consequences Interest to be paid along with the TDS amount; else the amount shall be determined and recovered as per the law Late fee of Rs. 100/- per day subject to a maximum of Rs. 5000/-

22 Consequences of not complyingwith TDS provisions Event TDS not deducted TDS certificate not issued or delayed beyond the prescribed period of five days TDS deducted but not paid to the Government or paid later than 10th of the succeeding month Consequences Interest to be paid along with the TDS amount; else the amount shall be determined and recovered as per the law Late fee of Rs. 100/- per day subject to a maximum of Rs. 5000/- Interest to be paid along with the TDS amount; else the amount shall be determined and recovered as per the law

23 Consequences of not complyingwith TDS provisions Event TDS not deducted TDS certificate not issued or delayed beyond the prescribed period of five days TDS deducted but not paid to the Government or paid later than 10th of the succeeding month Late filing of TDS returns Consequences Interest to be paid along with the TDS amount; else the amount shall be determined and recovered as per the law Late fee of Rs. 100/- per day subject to a maximum of Rs. 5000/- Interest to be paid along with the TDS amount; else the amount shall be determined and recovered as per the law Late fee of Rs. 100/- for every day during which such hfailure continues, subject tto a maximum amount of five thousand rupees

24 Excess / Erroneous deduction Any excess or erroneous amount deducted and paid to the Government account shall be dealt for refund under section 54 of the CGST Act, However, if the deducted amount is already credited to the electronic cash ledger of the supplier, the same shall not be refunded.

25 Transitional provision

26 Transitional provision

27 THANK YOU!