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Non Deduction of TDS on GST

31 August 2020

Under Section 51 of the CGST Act to be read with CGST Rule 66:

What are the consequences and further course of action in the event of failure of deducting TDS under the captioned provision?

Will merely ignoring the matter that "in an eligible case TDS on GST has not been deducted" create any problem later?

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3 Replies

CA Akshay Hiregange (Partner - Audit & Assistance) (4825 Points)
Replied 31 August 2020

Interest and possible penalty are the consequences. Below are extracts from Section 51

(6) If any deductor fails to pay to the Government the amount deducted as tax under sub-section (1), he shall pay interest in accordance with the provisions of sub-section (1) of section 50, in addition to the amount of tax deducted. (interest 18% p.a.)
(7) The determination of the amount in default under this section shall be made in the manner specified in section 73 or section 74. (Show case notice sections - 3/5 years)

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Pallab Jyoti Sarmah (4 Points)
Replied 31 August 2020

Thanks for the response, CA Akshay Hiregange

But in the given scenario TDS has not been deducted at all. Like Section 271(C) of the Income Tax Act, will there be penalisation for non-deduction under the CGST Act?