Govt Dept to deduct Tax of Supplier under GST

Introduction

The Government Departments are required to deduct tax at source @ 1% each for Central GST & State GST from the payments made by the Government departments to suppliers of taxable goods or services or both, where the total value of supplies under the contract exceeds 2.5 lac rupees. For this purpose, the Governments Departments are required to get themselves registered through common national portal www.gst.gov.in. The enrolment shall commence from17th June, 2017

Registration requirement of Govt Dept

A Tax Deduction and Collection Account Number issued under the Income Tax Act, 1961, shall be required for every such Department to be eligible for registration.

Deposit of Tax under GST by Govt Dept

The amount deducted by the departments has to be deposited within 10 days after the end of the month of deduction, and 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 other details. The failure to comply with the provisions shall attract interest @ 18%.

Monthly Return

Every such registered Department is required to file monthly online return in the form of GSTR-7 within 10 days of the end of the month.

Certificate by Govt Dept

The deductor Department is also required to issue an online certificate in the form of GSTR-7A mentioning therein the contract value, rate of deduction, amount deducted and the amount paid to the Government to the deductee.