TDS in GST

GST - Goods and Services Tax, India
GST Computation & Accounting

What is TDS in GST?

TDS Means Tax Deducted at Source

It is a tax which is deducted on certain payments

From 1 Oct 2018

On Payments by Government Departments to Vendors,Govt Department will deduct 2% TDS Under GST

This is applicable only if Contract Value is more than 250000

Note:-

• TDS under GST is separate from TDS under Income Tax
• Both TDS under GST and Income Tax will be applicable

Solving these with GST

Actually,Contractor charges GST on Bill Also

Suppose GST Rate is 18%

How will A calculate GST in this case

He will reduce TDS From his GST payable

#### Example

Suppose A gives Services to Govt for 10 lacs+ 18% GST

Govt will deduct 10000 TDS under Section 194C+20000 TDS under GST

Govt will pay A 1150000

(1180000-10000-20000)

Suppose Expenses of A are 4 Lacs+18% GST

COMPUTATION

 PARTICULARS AMT RATE AMOUNT OUTPUT GST 1000000 18% 180000 INPUT GST 400000 18% 72000 GST PAYABLE 108000 LESS TCS CREDIT 1000000 2% 20000 NET GST PAYABLE 88000

Hence, GST payable will be reduced from tax liability

#### What is Purpose of TDS Deduction in this case?

TDS deducted is treated like advance GST

Deductee claims Credit of it in his Electronic Cash Ledger

In easy language,It is reduced from GST Payable and balance GST payable to be deposite by challan by deductee

Section 51

TDS On Payments by Govt Authorities and PSU

Rate of TDS

TDS Rate is as follows

 Interstate 2% TDS (IGST 2%) Local 2% tds(1% CGST AND 1% SGST)

Cutoff

If total value is greater than 250000 In single contract,TDS in GST is to be deducted

#### Whether All companies have to Deduct TDS?

No

TDS is to be deducted only by Government Departments and PSU

Following persons are required to deduct TDS:-

1. a department or establishment of the Central Government or State Government; or
2. local authority; or
3. Governmental agencies; or
4. such persons or category of persons as may be notified by the Government on the recommendations of the Council

Persons notified under Section 51(1)(d):

1. an authority or a board or any other body, –
1. set up by an Act of Parliament or a State Legislature; or
2. established by any Government, with fifty-one per cent. or more participation by way of equity or control, to carry out any function;
2. Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860);
3. public sector undertakings

#### What is Procedure to be followed by Deductor (Govt Departments(PSU)?

They have to compulsory take separate registration for TDS

By 10 th of next month,they have to deposit TDS and file TDS Return in Form

Also,they have to electronically issue TDS Certificate to Deductee by 15th of Next Month

In case of late payment,18% interest is applicable

#### What is Procedure to be followed by Deductee (Contractor Giving Service to Govt)?

They have to normally file GSTR3B and GSTR1

But now,they have to show TDS Credit in their Return GSTR3B

In easy language,It is reduced from GST Payable and challan is deposited of balance amount

## Q1

Infosys,Bangalore Provided Technical Service To Ministry Of Finance,Delhi Of 50 Lacs+18% Gst

Ministry Of Finance Paid Infosys After Deducting Tds Under Gst And Income Tax

Suppose Expenses Of Infosys Are

Salary - 10 LACS

IT Expenses (From A Ltd) - 20 LACS+18% GST

What is TDS Rate as per income Tax?

10% Under sec. 194 J

What is TDS Rate as per GST?

2% IGST Under sec 51

What Is The Amount Received By Infosys?

 Particular Amount Taxable Value 5000000 Igst 18% 900000 Invoice Value 5900000 Less: Tds 194 J @ 10% 500000 Less: Tds GST sec 51 @ 2% 100000 Amount payble to infosys 5300000

What is GST payable by infosys?

Computation

 PARTICULARS AMT RATE AMOUNT OUTPUT GST 5000000 18% 900000 INPUT GST 2000000 18% 360000 GST PAYABLE 540000 LESS TDS CREDIT 5000000 2% 100000 NET GST PAYABLE 440000

Pass Entry In Books Of Both Parties:-

COMPUTATION

 PARTICULARS AMT RATE AMOUNT OUTPUT GST 10000000 18% 1800000 INPUT GST 2000000 18% 360000 GST PAYABLE 1440000 LESS TCS CREDIT 200000 NET GST PAYABLE 1240000

CASH LEDGER

 PARTICULARS CGST SGST IGST TOTAL OP BAL 0 0 0 0 ADD  AMT DEPOSITED BY CHALLAN 0 0 124000 124000 ADD  TDS CREDIT 0 0 20000 20000 TOTAL AMT AVAILABLE 0 0 144000 144000 LESS  AMT UTILIZED 0 0 144000 144000 CL BAL 0 0 0 0

CREDIT LEDGER

 PARTICULARS CGST SGST IGST TOTAL OP BAL 0 0 0 0 ADD  CREDIT TAKEN 0 0 360000 360000 TOTAL CREDIT AVAILABLE 0 0 360000 360000 LESS  CREDIT UTILIZED 0 0 360000 360000 CL BAL 0 0 0 0

## Q2

SK Ltd provided Manpower Services (Labour) to its different Clients

It provided Labour Service to its different clients on contract

 PARTY NAME AMT CGST SGST TOTAL TDS(INCOME TAX) TDS(GST) NET AMT RECD ONGC LTD 20000 1800 1800 23600 0 RELIANCE LTD 500000 45000 45000 590000 10000 MINSTRY OF OIL AND NATURAL GAS,CENTRAL GOVT 400000 36000 36000 472000 8000 GAIL,INDIA 240000 21600 21600 283200 4800 1160000 104400 104400 1368800

TDS Not Deducted because as per TDS in Income Tax limit 30000 single Contract or 100000 per year and TDS in GST limit is 250000

 PARTY NAME AMT CGST SGST TOTAL TDS(INCOME TAX) TDS(CGST) TDS(SGST) NET AMT RECD ONGC LTD 20000 1800 1800 23600 0 0 0 23600 RELIANCE LTD 500000 45000 45000 590000 10000 0 0 580000 MINISTRY OF OIL AND NATURAL GAS,CENTRAL GOVT 400000 36000 36000 472000 8000 4000 4000 456000 GAIL,INDIA 240000 21600 21600 283200 4800 0 0 278400 1160000 104400 104400 1368800

TDS (GST) Will be deducted on which of above transactions?

EXPENSES OF SK LTD ARE

 AMT CGST SGST TOTAL TDS(INCOME TAX) TDS(GST) NET AMT PAID Input Available(Yes/No) CA BILL OF PROFESSIONAL CHARGES 100000 9000 9000 118000 10000 FOOD FROM HALDIRAM 25000 1250 1250 27500 0 AMT PAID TO CAB OPERATOR 40000 2000 2000 44000 800

 AMT CGST SGST TOTAL TDS(INCOME TAX) TDS(GST) NET AMT PAID Input Available(Yes/No) CA BILL OF PROFESSIONAL CHARGES 100000 9000 9000 118000 10000 0 108000 YES FOOD FROM HALDIRAM 25000 1250 1250 27500 0 0 27500 NO AMT PAID TO CAB OPERATOR 40000 2000 2000 44000 800 0 43200 NO

COMPUTATION

 PARTICULARS AMT RATE CGST AMT RATE SGST OUTPUT GST 1160000 9% 104400 1160000 9% 104400 INPUT GST 100000 9% 9000 100000 9% 9000 GST PAYABLE 95400 95400 LESS TDS CREDIT 4000 4000 NET GST PAYABLE 91400 91400

CASH LEDGER

 PARTICULARS CGST SGST IGST TOTAL OP BAL 0 0 0 0 ADD AMT DEPOSITED BY CHALLAN 91400 91400 0 182800 ADD TDS CREDIT 4000 4000 8000 TOTAL AMT AVAILABLE 95400 95400 0 190800 LESS AMT UTILIZED 95400 95400 0 190800 CL BAL 0 0 0 0

CREDIT LEDGER

 PARTICULARS CGST SGST IGST TOTAL OP BAL 0 0 0 0 ADD CREDIT TAKEN 9000 9000 0 18000 TOTAL CREDIT AVAILABLE 9000 9000 0 18000 LESS CREDIT UTILIZED 9000 9000 0 18000 CL BAL 0 0 0 0

Learn in your speed, with individual attention - Teachoo Maths 1-on-1 Class