Meaning of Contract Value for GST TDS ? TDS on Telephone Bills by Govt Department

By | November 2, 2018
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(Last Updated On: November 2, 2018)

TDS under GST on Telephone Bills by Govt Department

Video Tutorial by CA Satbir Singh on Contract Value under GST

Our department is a central government department liable to deduct TDS under GST. We are having more than 100 landline telephone connection in our factory.

we make payment of Rs.200000/-(including GST) as telephone bill every month for all the connections.

We don’t have any contract for this telephone connection for a specified period. we can disconnect at any time and switch to some other telecom operator.

Due to non available of contract value, whether TDS to be deducted for every month under GST Act ?

My opinion : Word  “contract” has not been defined under CGST act

As per Indian Contract Act : Contract can be Express /in writing  or oral / implied by course of dealing

Therefore you are required to deduct TDS under CGST Act .

Relevant provisions of Section 51 of CGST Act 2017

Tax deduction at source .

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.

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