The following article contains a brief analysis of the TDS obligation under existing laws and GST:
TDS obligation (Section 51 of the CGST/SGST Act) |
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Sl |
Elements |
Under existing Law |
Proposed under GST |
1 |
Acts Governed |
Respective state VAT laws |
CGST/SGST Acts |
2 |
Type of Contract |
Works Contract |
Any Contract |
3 |
Payments made by |
Under TNVAT Act:
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(notification from the GST council notifying certain persons can be expected in the near future) |
4 |
Payments made to |
Any person executing works contract |
Any Supplier under a contract or agreement |
5 |
Threshold limit |
When the total payment to the dealer exceeds Rs. 1,00,000 per year |
When the aggregate payment under a contract exceeds Rs. 2,50,000 |
6 |
Rate of TDS |
The following are the rates of TDS under TNVAT Act:
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TDS at the rate of 1% where the total value of supply under a contract exceeds Rs. 2,50,000. TDS to be deducted on the entire amount of payment, once the contract value exceeds the threshold limit. |
7 |
Time limit for payment of TDS deducted |
Under TNVAT Act: On or before the 20th of the succeeding month |
On or before 10th of the succeeding month |
8 |
Returns |
Under TNVAT Act: On or before the 20th of the succeeding month |
Return by the tax deductor for TDS to be filed within 10th of the succeeding month in form GSTR-07 |
9 |
TDS Certificate |
TDS certificate in Form T to be issued within 15 days from the date of deposit of tax |
The deductor shall issue a certificate in Form GSTR-7A to the supplier within 5 days from the date of deposit of tax. Failure to issue the certificate within specified time shall attract late fee of Rs. 100/day up to a maximum of Rs. 5000. |
10 |
Failure to deposit tax |
Interest@ 2% per month or part of the month on the TDS deducted/deductible |
Interest @ 1.5% per month to be paid along with the TDS amount |
11 |
Exemptions |
No TDS to be deducted in the following cases:
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No TDS shall be deducted if the location of the supplier and the place of supply is in a different states/Union Territory from the place of registration of the recipient of Supply |