TDS Provisions under Section 51 of the CGST Act 2017 effective from 1.10.2018
The Goods and Services Tax Act, 2017 came into force in
India with effect from 1.7.2018.
The TDS i.e. Tax Deducted at Source provisions were deferred
till 30.9.2018 by various Notifications.
The TDS Provisions under Section 51 of the CGST Act, 2017
comes into force with effect from 1.10.2018 as per the latest Notification No.
51/2018 dated 13.9.2018.
The CGST Act Section 51 is given below
for ready reference.
51. (1) Notwithstanding anything to
the contrary contained in this Act, the Government may mandate,––
(a) a department or establishment
of the Central Government or State Government; or
(b) local authority; or
(c) Governmental agencies; or
(d) such persons or category of
persons as may be notified by the Government on the recommendations of the
Council, (hereafter in this section referred to as “the deductor”), to deduct
tax at the rate of one per cent. from the payment made or credited to the
supplier (hereafter in this section referred to as “the 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:
Provided that no deduction shall be
made if the location of the supplier and the place of supply is in a State or
Union territory which is different from the State or as the case may be, Union
territory of registration of the recipient.
Explanation.––For the purpose of
deduction of tax specified above, the value of supply shall be taken as the
amount excluding the central tax, State tax, Union territory tax, integrated
tax and cess indicated in the invoice.
(2) The amount deducted as tax
under this section shall be paid to the Government by the deductor within ten
days after the end of the month in which such deduction is made, in such manner
as may be prescribed.
(3) The deductor shall furnish to
the deductee a certificate mentioning therein the contract value, rate of
deduction, amount deducted, amount paid to the Government and such other
particulars in such manner as may be prescribed.
(4) If any deductor fails to
furnish to the deductee the certificate, after deducting the tax at source,
within five days of crediting the amount so deducted to the Government, the
deductor shall pay, by way of a late fee, a sum of one hundred rupees per day
from the day after the expiry of such five days period until the failure is
rectified, subject to a maximum amount of five thousand rupees.
(5) The deductee shall claim
credit, in his electronic cash ledger, of the tax deducted and reflected in the
return of the deductor furnished under sub-section (3) of section 39, in such
manner as may be prescribed.
(6) If any deductor fails to pay to
the Government the amount deducted as tax under sub-section (1), he shall pay
interest in accordance with the provisions of sub-section (1) of section 50, in
addition to the amount of tax deducted.
(7) The determination of the amount
in default under this section shall be made in the manner specified in section
73 or section 74.
(8) The refund to the deductor or
the deductee arising on account of excess or erroneous deduction shall be dealt
with in accordance with the provisions of section 54: Provided that no refund
to the deductor shall be granted, if the amount deducted has been credited to
the electronic cash ledger of the deductee.
TDS Rate under GST
The TDS rate under GST is 2%. In other words, the deductor has to deduct
tax at source @ 2% from the payment made or credited to the deductee for supply
of taxable goods or services or both.
The above Section comes into force
with effect from 1.10.2018 as per the Notification given below:
[To be published in the Gazette of India, Extraordinary,
Part
II, Section 3, Subsection
(i)]
Government of India Ministry
of Finance (Department
of Revenue)
Central
Board of Indirect Taxes
and
Customs
Notification No. 50/2018 – Central
Tax
New Delhi,
the 13th September, 2018
G.S.R. …..(E).— In exercise of the powers conferred by sub-section (3) of section 1 of the
Central Goods and
Services Tax
Act, 2017 (12
of 2017) and in supercession of
the notification of the Government of India in the Ministry of Finance, Department of Revenue No.
33/2017-Central Tax, dated the 15th September, 2017, published in
the Gazette
of India,
Extraordinary, Part II, Section 3, Sub-section (i) vide
number G.S.R. 1163 (E), dated the 15th September, 2017, except as respects things done or omitted to be done before such supersession, the Central Government hereby appoints the 1st day of October, 2018, as the
date on which the provisions of section 51 of the said Act shall come into force with respect to persons specified under clauses (a), (b) and (c) of sub-section (1)
of section 51 of the said
Act
and the persons specified below under clause
(d) of sub-section (1) of
section 51 of the
said Act, namely:-
(a) 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;
(b) Society established by the Central Government or the State Government or a Local
Authority under the Societies
Registration
Act, 1860 (21 of 1860);
(c) public sector undertakings.
[F. No.
349/58/2017-GST(Pt.)]
(Gunjan Kumar Verma)
Under Secretary to the Government
of India
Exemption of supplies made by Government Departments and PSUs to other Government Departments and vice-versa from TDS.
Please click the link given below to know more about TDS:
http://www.cbic.gov.in/resources//htdocs-cbec/gst/28092018_SOP_ON_TDS.pdf;jsessionid=2AAAAC32E60EB7469D17B6303CDA7D50
[To be published in the Gazette of India,
Extraordinary, Part II, Section 3,
Subsection
(i)]
Government of India Ministry
of Finance (Department of Revenue)
Central
Board of Indirect Taxes and Customs
Notification No.73/2018 – Central Tax
New Delhi, the 31st December,
2018
G.S.R. …..(E).— In exercise of the powers conferred by sub-section (3) of section 1 read with section 51 of the Central Goods and Services Tax Act, 2017 (12
of 2017), hereafter in this notification referred to as the
said
Act, the Central Government, on the
recommendations of
the Council, hereby makes the following further amendment in the notification of the
Government of India in the Ministry of Finance, Department of Revenue No. 50/2018-
Central Tax dated the
13th September, 2018 published in
the Gazette of India,
Extraordinary, Part II, Section 3, Sub-section (i)
vide number G.S.R 868 (E) dated the 13th September, 2018, namely:–
In the said notification, after the second proviso, the following
proviso shall be inserted,
namely:-
“Provided also that nothing in this notification shall apply
to the supply of goods or
services or both which takes place
between one person
to another person specified under clauses (a),
(b), (c) and
(d) of sub-section (1)
of section
51 of the said Act.”.
[F.No.20/06/16/2018-GST]
(Dr. Sreeparvathy S. L.)
Under Secretary to the Government
of India
Note:- The principal notification No. 50/2018- Central Tax, dated the 13th September, 2018 was published
in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)
vide number G.S.R 868 (E), dated the 13th September, 2018 and last amended vide notification No.
61/2018-Central Tax, dated the 05th November, 2018, published vide number G.S.R 1084(E), dated
the 05th November, 2018.
Please click the link given below to know more about TDS: