TDS Obligation under existing law and 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:

• Central/State Government
• Local Authority
• Department of Central/State Government
• Companies, including Government Companies
• Co-operative Society
• Educational Institutions and
• Trust

• A department of the Central Government or State Government
• Local Authorities
• Government Agencies
• Any other persons as recommended by the GST council

(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:

• Civil/maintenance works contract - 2% of the total amount payable
• Other works contract - 5% of the total amount payable

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:

• Where there is no transfer in property during execution of works contract
• No TDS certificate in Form S is produced by the dealer
• Transfer of property is involved in the course of inter-state trade or import

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