October 20 To October 26, 2018 u Taxmann’s Corporate Professionals Today u Vol. 43 u (^31389)
To illustrate, a PSU, registered in the State of
Delhi, sends its employees to Mumbai for con-
ducting an exhibition. For such purpose, PSU
entered into a contract with a hotel in Mumbai
for hiring a hall for 5 days. The Hotel will
charge CGST+SGST as its place of supply is in
Maharashtra in accordance with Section 12(3) of
the IGST Act. In this case, the location of the
supplier and the place of supply are in Maha-
rashtra while the recipient is registered in Delhi.
In such a scenario, TDS will not be deducted
by PSU while making payment to the Hotel.
3.3 Applicability of TDS on supplies between
distinct persons - A question arises whether
TDS is applicable on supplies made by one
branch to another of the same entity, say PSU
(i.e., distinct person)?
Although outstation branch of an entity has
been considered as a distinct person in the
GST, and transfer of goods and services has
been deemed as supply, yet there is no contract
between the branches to supply goods or ser-
vices. Further, a contract may be entered into
between two separate legal persons and not
with ourselves. Thus, TDS provisions would
not be applicable in case of supplies between
the distinct persons.
3.4 Ascertainment of date of payment of TDS
(assuming all the contracts are for more than
2,50,000): Illustrations : Date of entering into contract Date of Invoice Date of credit to the account of supplier Date of payment Date on which TDS is to be deducted 1-4-2018 14-8-2018 31-8-2018 10-10-2018 Not Applicable* 1-4-2018 1-10-2018 10-10-2018 31-8-2018 Not Applicable* 1-4-2018 1-7-2018 31-7-2018 31-8-2018 Not Applicable No written contract 1-10-2018 1-10-2018 15-11-2018 1-10-2018 1-4-2018 15-10-2018 31-12-2018 5-11-2018 5-11-2018 1-4-2018 15-10-2018 5-11-2018 31-12-2018 5-11-2018 vide Para No. 4 of SOP issued by the Law Committee of GST Council, dated 28 Sept., 2018 3.5 Will TDS be deducted on supplies attracting reverse charge? - Looking at the GST provi- sions, TDS will be deducted by the recipient on goods or services on which tax is required to be paid on reverse charge basis, such as, services received from the Government, goods transport agency, legal services, etc., because TDS shall be deducted at the time of making payment to the supplier, which has no con- nection with the deposit of tax under reverse charge by the recipient. However, vide SOP issued by the Law Commit- tee of the GST Council dated 28 Sept., 2018, no TDS is required to be deducted where the tax is to be paid on reverse charge basis by the recipient. 3.6 Whether TDS is required to be deducted in case of price revisions? - In case of any upward price revision of contract, TDS would be deducted on the entire amount of the con- tract. To Illustrate, Government entered into a contract with a supplier ABC where the value of taxable supply is 2 Lakh and payment of
1 Lakh has been made on 10-10-2018. Now, on 15-11-2018 the contract value is revised from 2 Lakh to 6 Lakh. In this case, TDS shall be deducted on entire amount, i.e., 6 lakhs,
while making remaining payment of 5 Lakh. In other words, 12,000 would be deducted when remaining payment of 5 Lakh is made.
3.7 Whether Public Sector Banks are also required
to get separate registration for TDS and deduct
TDS on supplies received by them? - The GST
Council vide Notification No. 50/2018-Central
Tax dated 13th September, 2018 has specified
that public sector undertakings shall deduct
TDS under GST.
CriTiCal issues emerging FrOm Tds under gsT
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