Tax deducted at source (APPLICABLITY GST )

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This discussion clarifies the applicability of GST on Tax Deducted at Source (TDS) based on Circular 23/2017. It explains that TDS should be calculated on the amount excluding GST, provided GST is shown separately. The circular's scope extends to both determining the TDS amount and checking TDS threshold limits, with GST generally excluded for both unless the recipient is under the GST composition scheme.

shivam singh

shivam singh (Querist)

30 January 2023 Circular 23/2017 dt 19.7.17 clarifies that TDS should be deducted on amount excluding GST, provided GST is indicated separately. Now, under Income Tax act, for what purpose should this circular be applied.

1. For the purpose of ‘determining the amount’ on which TDS should be calculation .

2. For the purpose of ‘determining TDS APPLICABILITY’ ie: scope of TDS threshold limits.

If the scope of the above circular be applied on point no 1 , then what is the scope of checking threshold limits(including GST or excluding ).

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 January 2023 For Determining the amount on which TDS to be deducted.
That should be excluding GST, provided GST charged separately.

shivam singh

shivam singh (Querist)

30 January 2023 For the purpose of ‘determining TDS APPLICABILITY’ ie: scope of TDS threshold limits.
FOR THIS?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 January 2023 Yes, applicable. GST if charged separately, it is not counted for TDS deduction as well as for threshold limit, provided the recipient is not under composition scheme.

shivam singh

shivam singh (Querist)

30 January 2023 CAN YOU EXPLAIN WHAT IS THE SCOPE FOR COMPOSITION SCHEME?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

31 January 2023 Refer: https://enterslice.com/learning/key-features-composition-scheme-under-gst/

&/or https://www.creditmantri.com/gst-composition-scheme/

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