Corporate Professional Today – October 20, 2018

388 October 20 To October 26, 2018 u Taxmann’s Corporate Professionals Today u Vol. 43 u^30

(l) Where the payment is made to an un-
registered supplier.

(m) Where the payment relates to “Cess”
component.

2.4 What is the rate of TDS and the value
of supply? - TDS shall be deducted from the
payment made or credited to the supplier of
taxable goods or services at the rate of -

u 1% under the CGST Act (+) 1% under
SGST Act in case of intra-State supplies,
and

u 2% under IGST Act in case of inter-State
supplies.

Value of supply shall be taken as the amount
excluding the central tax, State tax, Union ter-
ritory tax, integrated tax and cess indicated in
the invoice. [Explanation to Section 51(1)]

2.5 When is TDS required to be deducted? -
TDS shall be deducted at the time of making
payment or credit to the supplier.

2.6 Registration requirement of deductor - The
persons as referred to above, who are liable to
deduct tax at source, shall obtain a separate
registration in terms of Section 24(vi) of the
CGST Act in Form GST REG-07. The Registration
certificate will be issued in FORM GST REG-06.

All the DDOs in the Government, who are per-
forming the role as deductors have to register
with the common portal and get the GST Iden-
tification Number (GSTIN). [Vide Circular No.
65/39/2018-DOR dated 14th September, 2018]

2.7 Return and Payment - TDS shall be depos-
ited in the Government treasury along with the
submission of monthly return in Form GSTR-
07 by 10th day of the month, succeeding the
month in which TDS was deducted.

However, no return shall have to be submitted
for a month in which no deduction is made.

Also, the provisions of Annual Return are not
applicable on the deductor.

2.8 TDS Certificate - TDS Deductor shall issue
a TDS certificate in FORM GSTR-7A to the

deductee within 5 days of crediting the amount

so deducted to the Government. Following details

are required to be mentioned on the certificate:

(a) the contract value,

(b) rate of deduction,

(c) amount deducted,

(d) amount paid to the appropriate Gov-

ernment, and

(e) other prescribed particulars.

2.9 Consequences of Failure to :

(a) Deduct TDS - The deductor shall pay

interest in accordance with the provi-

sions of section 50(1)

(b) Furnish TDS certificate to the deductee

• If the deductor fails to furnish the
  certificate to the deductee within 5
  days of crediting the amount, then the
  deductor shall be liable to pay a late
  fee of 100 per day until the failure is rectified, subject to a maximum of 5,000.

3. Critical issues
   3.1 Supplies from unregistered persons - Look-
   ing at the provisions, if the supply is made by
   the unregistered person to specified deductor,
   then TDS shall be deducted by the deductor,
   notwithstanding that the deductee would not be
   eligible to claim credit of amount so deducted.
   However, as per the SOP issued by Law Com-
   mittee of GST Council dated 28 Sept., 2018,
   TDS is not required to be deducted on payment
   made to unregistered supplier.
   3.2 Whether TDS shall be deducted on all
   inter-State as well as intra-State supplies?

• TDS shall be deducted on all inter-State as
  well as intra-State supplies. However, as per
  proviso to Section 51(1) of the CGST Act, no
  TDS shall be deducted in those cases where the
  location of supplier and place of supply are in
  same State/UT and the recipient is registered
  in a different State.

CriTiCal issues emerging FrOm Tds under gsT