How to make Payment of GST TDS and Penalty provision for non compliance

By | September 14, 2018
(Last Updated On: September 15, 2018)

GST TDS Payment

TDS under GST is required to be deducted w.e.f 01.10.2018 refer Notification No 50/2018 Central Tax : TDS provision of Section 51 of CGST act enforced from 01.10.2018

When do we require to make the payment and file GSTR-07?

  • The amount deducted as tax under section 51 of CGST Act shall be paid to the Government by the deductor within ten days after the end of the month in which such deduction is made

Do we require to issue TDS Certificate?

Section 51(3) of CGST Act 2017

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.

Rule 66(3) of CGST Rules 2017

The certificate referred to in sub-section (3) of section 51 shall be made available electronically to the deductee on the common portal in FORM GSTR-7A on the basis of the return furnished under sub-rule (1).

TDS Certificate in Form GSTR-07A will be downloadable from the portal by supplier after accepting the transactions uploaded by deductor.

Is there any penalty for any default in issuing TDS Certificate?

Section 51(4) of CGST Act 2017

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.

Is there any penalty for any default in deducting tax?

TDS under GST is required to be deducted w.e.f 01.10.2018 refer Notification No 50/2018 Central Tax : TDS provision of Section 51 of CGST act enforced from 01.10.2018

Section 51(6) of CGST : – Interest if GST TDS not Paid

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.

The interest rate is 18% w.e.f. 1-7-2017  under section 50 (1) of CGST Act vide  Notification No. 13/2017 – Central Tax Dated 28th June, 2017 and Notification No. 6/2017 – Integrated Tax Dated 28th June, 2017 

Section 122 of CGST Act 2017 :  Penalty if GST TDS not deducted

(1) Where a taxable person who—

(v)fails to deduct the tax in accordance with the provisions of sub-section (1) of section 51, or deducts an amount which is less than the amount required to be deducted under the said sub-section, or where he fails to pay to the Government under sub-section (2)thereof, the amount deducted as tax;

he shall be liable to pay a penalty of

  • ten thousand rupees or
  • an amount equivalent to the tax evaded or
  • the tax not deducted under section 51 or short deducted or deducted but not paid to the Government,

whichever is higher.

How will the deductee claim this tax deducted?

  • There will be a TDS/TCS credit received table similar to table 9 of GSTR-2. Supplier has to take action on the transactions to accept/reject. Amount of TDS included in accepted transactions will be credited to the cash ledger of supplier.

If we had deducted excess TDS, How can it be rectified?

  • 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.

 

 

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