Deduction of gst by welfare association

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P.C. Chaturvedi (Querist)

30 October 2019 We have formed an association to maintain various services of our campus. We have elevators in our building and want to have annual service contract with the suppliers. It is around Rs. 60000 for one lift. Our association is not registered. Are we supposed to deduct a percentage of GST being charged for the contract? We don't have PAN and GST number for our association.

CA Anita Bhadra

CA Anita Bhadra (Expert)

31 October 2019 You need not deduct percentage as GST as you are an unregistered recipient of services

P.C. Chaturvedi

P.C. Chaturvedi (Querist)

31 October 2019 Thanks. Could you give me reference to clause stating the same as some members have different opinions? Thanks

CA Anita Bhadra

CA Anita Bhadra (Expert)

31 October 2019
This article will be helpful for understanding the concept and references:-

https://taxguru.in/goods-and-service-tax/club-association-relevance-concept-mutuality-gst.html

P.C. Chaturvedi

P.C. Chaturvedi (Querist)

31 October 2019 I think I have not framed the question correctly. My question is our association pays lift supplier for annual maintenance contract say Rs 60000 for lift. This amount includes GST. So are we suppose to deduct certain percentage from this total amount of Rs 60000 and deposit (similar to to what a house buyer deducts 1% from the amount payable to the person from whom he buys the house and deportes in income tax department)? If yes, then how we do it without GST number? If we have to get GST number how do we get this without getting registration of the association?

CA Anita Bhadra

CA Anita Bhadra (Expert)

01 November 2019 You need not deduct TDS under GST Act.
There is a provision for TDS deduction @ 2% on payments to the contractor but that is on Payment by Government Company to contractors, if the contract value is more than Rs 2,50,000/-.

Other than this, there is no such provision in the GST Act where an unregistered person needs to deduct GST / TDS and pay to Government .

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