TDS utilization and accounting under GST system in India

Government, Government undertakings and other notified entities making contractual payments in excess of Rs. 10 Lakhs to suppliers. While making such payment, the concerned Government/authority shall deduct 1% of the total payable amount and remit it into the appropriate GST account.

Instructions to those deduct TDS under GST system in India?

Any amount shown as TDS will be reflected in the GST electronic cash ledger of the concerned GST supplier. Such GST supplier can utilize this amount towards discharging his liability towards tax, interest fees and any other amount.

How is deducted TDS accounted for such TDS?

TDS accounted can be used in the following ways:

The person or firm who deducts TDS has to mandatorily be registered under section 19 read with Schedule III of MGL.

The person or firm who deducts TDS need to remit such TDS collected by the 10th day of the month succeeding the month in which TDS was collected and reported in GSTR 7.

The amount deposited as TDS will be reflected in the electronic cash ledger of the supplier.

They need to issue certificate of such TDS to the deductee within 5 days of deducting TDS failing which fees of Rs. 100 per day subject to maximum of Rs. 5000/- will be payable by such deductor.

Here, the details of TDS under GST tax system is explained. If you would like to comment more about Tax Deducted at Source under GST tax payment, please opine below:

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