Introduction:

TDS stands for Tax Deducted at Source is a process to collect tax based on specific percentages on the payable amount by the receiver on goods and services and collected tax is a deposit to government. In Section 51 of the CGST act to be read with CGST rule 66, the provision about TDS is given.

In GST terms and condition, TDS is deducted at the rate of 2% on the payment made by the supplier of taxable goods and services. TDS deduction happens only when the value of the supply of taxable goods and services exceeds 250000.

 Who are liable to deduct TDS?

These are the following entities that could be liable to deduct TDS under GST law:

Local authority
Government agencies
Department of Central Government
Department of State Government
Establishment
Notified person of Central or State Government
Public Sector Undertaking
Registration Requirements for TDS Deductors: 

Registration is a mandatory thing for a person who is liable to deduct TDS, and there is no threshold limit for this. GST registration can be obtained without PAN, but having TAN is indispensable.

 
When and whom should we paid TDS:

A taxpayer will pay TDS within ten days from the end of the month in which tax is deducted. They provide payment to Central Government in case of the IGST, CGST and State Government in case of SGST.

Impact of TDS on civil contractors:

In every year the Indian government, announce more than 1000 civil contracts throughout the country. This contract includes the construction and repairing of the national highway, which cost more than Rs 100 crores. Moreover, these contracts are taken by big construction companies. However, companies have to face problems due to GST and due to the TDS liability.

Government need to deduct TDS from contractors who ensure that the contractors and all other subs- contractors have to pay tax compliance. Under GST, it will be imperative for contractors to get registered and fulfil tax compliance.

Form to file the TDS return:

GSTR-7 form is required by a deducting tax person to file a TDS return within ten days from the end of the month. When a supplier is not registered in GSTIN, their name can be mentioned in the form.

Refund of TDS under GST is possible?

Yes, it is possible if any excess amount is deducted and paid to the government, a refund can be claimed. The applicant has a right to not produced an extra amount of tax to the government.

Frequently Ask Question (FAQ):

Q1- What is TDS?

TDS mean Tax Deducted at the source. It introduced to collect tax at the source from where an individual income is generated.

Q2- What is the rate of TDS Deduction?

TDS is deducted at a rate of 2% on the payment made to the supplier of taxable goods and services.

Q3- What is the limit of deducting TDS under GST?

The liability of deducting TDS is mandatory only if the value of the supply of taxable goods and services exceeds 2.5 lakh.

Q4- How many times is required for payment of TDS?

A person would be liable to make payment of TDS within ten days of the next month.

Drafted By:
CS.A.Maniraj.,B.Com.,ACS.,CA(Fin), Independent Director 
Certified CSR Professional., Certified GST Professional.