CBIC has issued a Circular on Guidelines for Deductions and Deposits of GST TDS by the DDO (i.e. under Section 51 of the CGST Act, 2017), from the payment made or credited to the supplier (Deductee) of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees.
1. Section 51 of the CGST Act 2017 provides for deduction of tax by the Government Agencies (Deductor) or any other person to be notified in this regard, from the payment made or credited to the supplier (Deductee) of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees. The amount deducted as tax under this section shall be paid to the Government by deductor within ten days after the end of the month in which such deduction is made alongwith a return in FORM GSTR-7 giving the details of deductions and deductees. Further, the deductor has to issue a certificate to the deductee mentioning therein the contract value, rate of deduction, amount deducted etc.
2. As per the Act, every deductor shall deduct the tax amount from the payment made to the supplier of goods or services or both and deposit the tax amount so deducted with the Government account through NEFT to RBI or a cheque to be deposited in one of the authorized banks, using challan on the common portal. In addition, the deductors are entrusted the responsibility of filing return in FORM GSTR-7 on the common portal for every month in which deduction has been made based on which the benefit of deduction shall be made available to the deductee. All the DDOs in the Government, who are performing the role as deductor have to register with the common portal and get the GST Identification Number (GSTIN).
3. The subject section which provides for tax deduction at source was not notified to come into force with effect from 1st July, 2017, the date from which GST was introduced. Government has recently notified that these provisions shall come into force with effect from 1st October, 2018, vide Notification No. 50/2018 – Central Tax dated 13th September, 2018.
4. For payment process of Tax Deduction at Source under GST two options can be followed, which are as under:
Option I: Generation of challan for every payment made during the month
Option II: Bunching of TDS deducted from the bills on weekly, monthly or any periodic manner
5. In order to give effect to the above options from 01.10.2018, a process flow of deduction and deposit of TDS by the DDOs has been finalised in consultation with CGA for guidance and implementation by Central and State Government Authorities. The process flow for Option I and Option II are described as under: (contd…. please refer above attachment)
CBIC’s 67 FAQs on GST TDS u/s 51 of CGST Act: Ready Reckoner for DDOs/ Other Deductors
CBIC has issued a set of 67 FAQs on issues relating to ‘GST TDS’ under Section 51 of the CGST Act 2017. These FAQs have been issued as a part of the SOPs/ Ready Reckoner for DDOs/ Other Deductors in GST, as under:
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Finally ‘GST TDS/ TCS’ Applicable from 1 Oct. 2018 under CGST Sections 51/ 52: CBIC
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Challan generating process for depositing the amount (TDS) deducted from suppliers/ contractors, Whether a DDO should compulsorily have a Bank account from where to make RTGS, etc.? If no Bank accounts in the name of a DDO then also the same process may be made? Since all the payments are made to the suppliers/ contractors directly from the F.O.C only, received by the DDO from the Government, and where there is no any connection of Bank accounts. please clarify.