Concept Of TDS on GST :
The concept of TDS under indirect taxation was not prevalent under erstwhile law. Also, TDS on GST provisions were not introduced along with the introduction of the Goods and Services Tax. Accordingly, a special procedure is laid down for the same in case of TDS on GST.
Provisions relating to tax deduction at source under GST, is made effective from 1st October 2018. Notably, it is excluded under most of the common provisions and procedures to be followed under GST like composition scheme; registration application; returns; payment of tax etc.
In the present article we will figure out the provisions relating to TDS; understand the section and rule covering GST provisions relating to filing of Form GSTR-7, what is TDS on GST? and briefly understand everything about the filing of Form GSTR-7.
TDS on GST Provisions
Let us understand in brief all the following provisions relating to TDS on GST-
- Persons liable to deduct TDS under section 51;
- What is Registration procedure to be followed by the TDS deductor;
- Rate of TDS deduction;
- Payment of amount deducted as TDS; and
- Flowchart covering the coverage applicability of TDS.
Who is liable to deduct TDS under section 51
Notification no. 33/2017- Central Tax dated 15th September 2017 lists down the categories of persons who is liable to deduct TDS. The same is highlighted hereunder
TDS on GST Registration Procedure
The person liable to deduct TDS under provisions of section 51 of the Central Goods and Services Tax Act, 2017 is mandatorily required to obtain GST registration irrespective of the threshold exemption limit. The GST registration procedure is briefed hereunder-
What is current TDS rate?
The person is liable to deduct TDS @ 1% CGST + 1% SGST or 2% IGST. It is important to note down the following points –
- TDS is to be deducted only when the total value of the supply under a contract is more than INR 2.50 Lakhs; and
- The value of supply shall exclude the tax reflected in the invoice like CGST, SGST, IGST, UTGST or cess.
When is TDS Applicable
The amount deducted in form of TDS is to be deposited to the Government within 10 days of the end of the respective month.
Entire applicability or not with regard to the provisions of TDS under GST is summarized in the following flowchart
TDS on GST in GSTR-7 Rule Covering Provisions
TDS deduction under the provisions of section 51 is required to furnish monthly GST returns in Form GSTR-7. Following section and rule deals with the GSTR 7 filing process under GST law –
Section 39(3) of the Central Goods and Services Tax Act, 2017; read with
Rule 66 of the CGST Rules, 2017.
The gist of both the above section as well as TDS new rules is summarized hereunder –
Relevant section/ rule | Particulars |
|---|---|
Section 39(3) of the CGST Act | Registered person liable to deduct tax at source under provisions of section 51 of the CGST Act is required to furnish a monthly return within ten days in the prescribed form. |
Rule 66 of the CGST Rules |
|
Everything About the GSTR 7 Filing Process
Let us understand all the following points attached with the GSTR-7 return filing –
- The due date for filing of Form GSTR-7;
- GSTR-7 filing process Steps by step guide; and
- Coverage of GSTR-7 return filing.
GSTR 7 due date
As per provisions of section 39(3) of the CGST Act, the deductor is liable to furnish a return in Form GSTR-7 within 10 days of the succeeding month. Accordingly, the monthly due date of furnishing of Form GSTR-7 is tabulated hereunder-
Relevant section/ rule | Particulars |
|---|---|
April | 10th May |
May | 10th June |
June | 10th July |
July | 10th August |
August | 10th September |
September | 10th October |
October | 10th November |
November | 10th December |
December | 10th January |
January | 10th February |
February | 10th March |
March | 10th April |
GSTR-7 Return Filing via GST Portal
The deductor needs to follow the below steps for filing Form GSTR-7 through the GST portal –
STEP 1 – Visit https://www.gst.gov.in;
STEP 2 – Click ‘Login’;
STEP 3 – Provide appropriate ‘Username’, ‘Password’ and ‘Characters’;
STEP 4 – Click ‘LOGIN’;
STEP 5 – Click ‘Return Dashboard’;
STEP 6 – Select ‘Financial Year’ and ‘Return Filing Period’ from the drop-down list;
STEP 7 – Click ‘Search’; and
STEP 8 – Select the mode of filing of Form GSTR-7 i.e., ‘PREPARE ONLINE’ or ‘PREPARE OFFLINE’.
Details to be Provided in GSTR-7
Sr No. | Particulars | Details |
|---|---|---|
1. | GSTIN | 15 digit Goods and Services Tax Identification Number of the Deductor |
2. | Legal name of the Deductor Trade name of the Deductor, if any | This will be auto-populated |
3. | Following details are to be provided-
| |
4. | Amendments to details of tax deducted at source in respect of any of the earlier tax period | Following details are to be provided-
|
5. | Tax deduction at source and paid |
|
6. | Interest, Late fee payable and paid |
|
7. | GST Refund claim from electronic cash ledger |
|
8. | Debit entries in ‘Electronic Cash Ledger’ for TDS/ interest payment (populated after payment of tax as well as submission of return). | Integrated tax, Central tax and State or UT tax bifurcated into Tax paid in cash/ Interest/ Late fee |
GSTR-7 Form View-Point of Deductee
The person liable to deduct TDS (i.e., deductor) is required to furnish a monthly return in Form GSTR-7. GST return filing via Form GSTR-7 is also important from the view-point of the deductee. The reason for the same is explained hereunder
In nut-shell, it is important that the deductor timely and accurately files the return in Form GSTR-7.
TDS on GST Synopsis
The gist of the entire article is covered hereunder –
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