Deductions And Deposits Of TDS Under GST
Deductions And Deposits Of TDS Under GST
Vide notification no. 50/2018 – Central Tax dated 13th October, 2018, the Government has notified 1st October, 2018 as a date on which the provisions of section 51 of the Central Goods and Service Tax Act, 2017 relating to tax deducted at source (TDS) would be forcible.
In general, the provisions of section 51 are applicable to the government agencies and such other person to be notified in this regard. In order to ensure proper implementation of the provisions of section 51, the Government of India, vide circular no. 65/39/2018-DOR dated 14th September, 2018, has provided guidelines for the deductions and deposits of TDS by the DDO (i.e. Drawing and Disbursing Officer) and the same is explained in the present article.
As per the clarification, done in the above referred circular, the TDS so deducted can be paid to the government by following under mentioned two options –
Option I – Bill-wise deduction and deposit of TDS;
Option II – Periodical bunching of deduction and deposit of TDS.
Bill Wise GST TDS Deduction
Under this option, TDS is required to be deducted and deposited for each bill, individually. It is required to generate CPIN (Common Portal Identification Number) (i.e. challan) for payment of TDS of each individual bill and such CPIN so generated should be mentioned in the bill itself. DDO needs to follow the below-mentioned steps:
Step 1
Bill should be prepared based on the expenditure sanctioned. It is mandatory to mention the net amount payable to the contractor and 2% TDS in the bill.
Step 2
Visit the site https://www.gst.gov.in/ with appropriate user id and password.
STEP 3
Generation of CPIN (i.e. challan) – While generating CPIN, payment mode needs to be selected which can be either (a) NEFT / RTGS or (b) OTC.
In case of NEFT / RTGS mode, it is required to mention the CPIN number (as beneficiary’s account number), RBI (as beneficiary) and IFSC code of the RBI with the request to payment authority to make the payment in favour of the RBI.
In case of OTC mode, it is necessary to request the payment authority to issue ‘A’ category government cheque, such cheque can be in favour of one of the 25 authorized banks. The cheque needs to be deposited along with the CPIN with any of the branches of the authorized bank so selected.
Step 4
Generation of CIN (Challan Identification Number) – When the payment is successfully processed, CIN would be generated by the RBI or the authorized bank and the said CIN so generated would be shared electronically with the GSTN portal.
Step 5
Maintenance of records / register – It is necessary to maintain records / register as per Annexure ‘A’ tabulated herein below –
Annexure – A – Record to be maintained by the DDO for filing GSTR – 7
| Sr. No. | GSTIN of the Deductee |
Trade Name (if any) |
Amount paid to the Deductee on which tax has been deducted | Integrated Tax |
Central Tax |
State/ UT Tax |
Total |
Step 6
Generation of TDS Certificate – TDS certificate can be generated in FORM GSTR – 7A after the filing of the monthly return.
Bunching of GST TDS Deduction
In case of a large number of payments, an option I (mentioned above) would be practically impossible since a large number of challans would be required to be generated. In order to avoid such problem, option II has been provided and under option II TDS needs to be deducted from each bill and the same would be kept under the Suspense head.
Final deposit of this bunch amount from the suspense head can be done on weekly, monthly or any other periodic basis. In case of opting for option II, DDO needs to follow the below mentioned steps:
Step 1
Bill should be prepared based on the expenditure sanctioned. It is mandatory to mention the net amount payable to the contractor and 2% TDS in the bill. TDS amount needs to be mentioned in the bill for the recording of the same in the Suspense head.
Step 2
Maintenance of records –A proper record of TDS booked under the Suspense head need to be maintained in order to obtain total amount payable at the time of preparing CPIN.
Step 3
Visit the site https://www.gst.gov.in/ with appropriate user id and password.
Step 4
Generation of CPIN (i.e. challan) – At the periodic interval, DDO needs to deposit the TDS by preparing the CPIN on the GST portal. While generating CPIN, payment mode needs to be selected which can be either (a) NEFT / RTGS or (b) OTC.
In case of NEFT / RTGS mode, it is required to mention the CPIN number (as beneficiary’s account number), RBI (as beneficiary) and IFSC code of RBI with the request to payment authority to make payment in favour of RBI.
In case of OTC mode, it is necessary to request the payment authority to issue ‘A’ category government cheque, such cheque can be in favour of one of the 25 authorized banks. The cheque needs to be deposited along with the CPIN with any of the branches of the authorized bank so selected.
Step 5
Generation of CIN (Challan Identification Number) – When the payment is successfully processed, CIN would be generated by the RBI or the authorized bank and the said CIN so generated would be shared electronically with the GSTN portal.
Step 6
Maintenance of records / register – It is necessary to maintain records / register as per Annexure ‘A’ tabulated herein below –
Annexure – A – Record to be maintained by the DDO for filing GSTR – 7
| Sl. No. | GSTIN of the Deductee |
Trade Name |
Amount paid to the Deductee on which tax is deducted | Integrated Tax |
Central Tax |
State/ UT Tax |
Total |
Step 6
TDS certificate can be generated in FORM GSTR – 7A after the filing of the monthly return.
