2% TDS for GST on Value to be Deducted on All
Payments above Rs. 2.50 lakhs from 1 Oct, 2018
·
Guidelines
for Deductions and Deposits of TDS under GST by DDO (Drawing and Disbursing
Officer)
[CGST Circular No. 65 dated 14th
September 2018]
Subject: Guidelines for Deductions and Deposits of TDS by the DDO
under GST
Section 51 of the CGST Act 2017 provides for deduction of tax by
the
Government Agencies (Deductor) or any other person to be notified in this regard, from
the
payment made or credited to the supplier (Deductee) of taxable goods
or services or both, where the total value
of
such supply, under
a contract, exceeds two lakh and fifty
thousand rupees. The amount deducted as tax under
this section shall be paid to the Government by deductor within ten days after the
end
of the month in which such deduction is made alongwith a return in FORM GSTR-7 giving the
details of deductions and deductees. Further, the
deductor
has
to issue
a certificate
to the deductee
mentioning therein
the
contract value, rate of deduction, amount deducted etc.
2. As per the Act, every deductor shall deduct the tax amount from the
payment made to the supplier of goods or services or both and deposit the tax
amount so deducted with the Government account through NEFT to RBI
or a cheque to be deposited in one of
the authorized banks, using challan on the
common portal. In addition, the deductors are entrusted the responsibility of
filing return in FORM GSTR-7 on the common portal for every month in which deduction
has
been made based on which
the
benefit of
deduction shall be made available to the deductee. All the DDOs in the Government, who
are performing
the
role as deductor have to register with the common portal and get
the
GST Identification Number (GSTIN).
3. The subject section which provides for tax deduction at source was not notified to come into force with effect from 1st July, 2017, the date from which
GST was introduced. Government has recently notified that these provisions shall come into force with effect from 1st
October, 2018, vide Notification No. 50/2018 – Central Tax dated 13th September,
2018.
4. For payment process of Tax Deduction at Source under GST two options
can be
followed,
which are as under:
Option I: Generation of challan for every payment made during the
month
Option II: Bunching of TDS deducted from the bills on
weekly, monthly or any
periodic manner
5. In order to give effect to the above options from 01.10.2018, a process flow
of
deduction and deposit of TDS by the DDOs has been finalised in consultation with CGA for guidance and implementation by
Central and State Government Authorities. The
process flow for Option I
and Option II are
described as under:
Option I - Individual Bill-wise
Deduction and its Deposit
by the DDO
6. In this option, the DDO will have to deduct as well as deposit the GST
TDS
for each bill individually by generating a CPIN (Challan) and mentioning it in the Bill itself.
7. Following process shall be
followed by the DDO in this regard:
(i) The DDO shall prepare the Bill based on the Expenditure Sanction.
The Expenditure Sanction shall contain the (a) Total amount, (b)
net
amount payable to the Contractor/Supplier/Vendor and (c) the
2%
TDS amount of GST.
(ii) The DDO shall login into the GSTN Portal (using his GSTIN)
and generate the CPIN (Challan). In the CPIN he shall have to fill in the desired amount of payment against one/many Major Head(s) (CGST/SGST/UTGST/IGST)
and the relevant
component
(e.g. Tax) under each of
the
Major
Head.
(iii) While generating the CPIN, the DDO will have to select mode of payment as either (a)
NEFT/RTGS or (b) OTC. In the OTC mode, the
DDO
will have
to
select the Bank where the
payment will be deposited through OTC mode.
(iv) The DDO shall prepare the bill on PFMS (in case of Central Civil
Ministries of GoI),
similar payment portals
of other Ministries/Departments of GoI or of
State Governments for
submission to the respective payment authorities.
(v) In the
Bill,
(a) the net amount payable
to
the Contractor; and
(b) 2% as TDS
will be specified
(vi) In case of NEFT/RTGS mode, the DDO will have to mention the CPIN Number (as beneficiary’s account number),
RBI (as beneficiary) and the IFSC Code of RBI with the
request to payment authority to make
payment in favour of
RBI with these credentials.
(vii) In case of
the
OTC mode, the
DDO will have to
request the
payment authority
to issue ‘A’ Category Government Cheque in
favour of one of the 25 authorized Banks. The Cheque may
then be
deposited
along with
the
CPIN with any
of branch of
the
authorized Bank so selected by the DDO.
(viii) Upon successful payment, a CIN will be generated by the
RBI/Authorized Bank and will be shared electronically
with the
GSTN Portal. This will get credited in the electronic Cash Ledger
of the
concerned DDO
in
the GSTN Portal. This can be viewed and the details of CIN can be noted by
the
DDO anytime on GSTN portal using his Login credentials.
(ix) The DDO should maintain a Register
as
per proforma given in
Annexure ‘A’
to
keep record of all TDS deductions made by him
during
the
month. This Record will be helpful at
the time of filing
Monthly Return (FORM GSTR-7) by the DDO. The DDO may
also make use of the offline utility available on the GSTN Portal
for this purpose.
(x) The DDO shall generate TDS Certificate through the GST
Portal in
FORM GSTR-7A after
filing of
Monthly Return.
Option
II
- Bunching of deductions and its deposit
by the DDO
8. Option-I may not
be suitable for DDOs
who
make
large number
of payments in a month as it would require them
to
make large number of challans
during the month. Such DDOs may
exercise this option wherein the DDO will
have to deduct the TDS from
each bill, for keeping it under the Suspense Head. However, deposit of this bunched amount from
the
Suspense Head can be made
on
a weekly, monthly or
any
other periodic basis.
9. Following process shall be
followed by the DDO in this regard:
(i) The DDO shall prepare the Bill based on the Expenditure Sanction.
The Expenditure Sanction shall contain the (a) Total amount, (b)
net
amount payable to the Contractor/Supplier/Vendor and (c) the
2%
TDS amount of GST.
(ii) The DDO shall prepare the bill on PFMS (in case of Central Civil Ministries of GoI), similar payment portals
of other Ministries/Departments of GoI or of
State Governments for
submission to the respective payment authorities.
(iii) In the
Bill, it will be specified
(a) the net amount payable
to
the Contractor; and
(b) 2% as TDS
(iv) The TDS amount shall be mentioned in the Bill for booking in the Suspense Head (8658 - Suspense; 00.101 - PAO
Suspense; xx – GST TDS)
(v) The DDO will require to maintain the Record of the TDS so being
booked under the Suspense Head so that at the time of preparing the CPIN for making payment on weekly/monthly
or
any other
periodic basis, the total amount could be easily worked out.
(vi) At any
periodic interval, when DDO needs to deposit the TDS amount,
he
will prepare the CPIN
on the GSTN Portal for the amount (already booked under
the
Suspense Head).
(vii) While generating
the
CPIN, the DDO will have to
select mode of
payment as either (a) NEFT/RTGS or (b) OTC. In the OTC mode,
the DDO will have
to
select the Bank where the
payment will be deposited through OTC mode.
(viii) The DDO shall prepare the bill for the bunched TDS amount for payment through the
concerned payment authority. In the Bill, the DDO will give reference of all the earlier paid bills from
which 2%
TDS
was deducted and kept in the suspense head. The DDO may also attach a certified copy of the record maintained by him in this
regard.
(ix) The payment authority will pass the bill by clearing the Suspense Head operated against that particular DDO after exercising
necessary checks.
(x) In case of NEFT/RTGS mode, the DDO will have to mention the
CPIN Number (as beneficiary’s account number),
RBI (as beneficiary) and the IFSC Code of RBI
with the request to payment authority to make
payment in favour of RBI
with these credentials.
(xi) In
case
of the OTC
mode,
the
DDO will have to
request the
payment authority
to issue ‘A’ Category Government Cheque in
favour of one of the 25 authorized Banks. The Cheque may
then be
deposited
along with
the
CPIN with any
of branch of
the
authorized Bank so selected by the DDO.
(xii) Upon successful payment, a CIN will be generated by the RBI/Authorized Bank and will be shared electronically with the GSTN Portal. This will get credited in the electronic Cash Ledger
of the
concerned DDO
in
the GSTN Portal. This can be viewed and the details of CIN can be noted by
the
DDO anytime on GSTN portal using his Login credentials.
(xiii) The DDO should maintain a Register
as
per proforma given in Annexure ‘A’
to keep record of all TDS deductions made by him
during
the
month. This Record will be helpful at
the time of filing
Monthly Return (FORM GSTR-7) by the DDO. The DDO may also make use of the offline utility available on the GSTN Portal for
this purpose.
(xiv) The DDO shall file the Return in FORM GSTR-7 by 10th
of the following month
(xv) The DDO shall generate TDS Certificate through the GSTN Portal in FORM
GSTR-7A
10. Departments in Central Government should instruct all its DDOs under them
to follow the above procedure for payment of GST TDS amount deducted from payments to be made to suppliers.
11. Difficulty,
if any, in
implementation of
this circular
may please be
brought to the notice of Department of Revenue.
Annexure A
Record to be maintained by the DDO for filing of GSTR7
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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 |
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