When is Tax deducted at source as per GST Law

Last Updated at: March 16, 2020
748
Tax is deducted at source as per GST (Goods & Services Tax) law when payment made to a supplier exceeds Rs 2.5 Lakh for exchange of taxable goods or services.

Tax is deducted at source as per GST (Goods & Services Tax) law when payment made to a supplier exceeds Rs 2.5 Lakh for exchange of taxable goods or services. Additionally, this value is not inclusive of Central, State, or Union Territory/Integrated & Cess taxes or any other forms of tax collected under GST law. 

Other Conditions for TDS on GST

    1. If the contract value of taxable supply is greater than Rs.2.5/- Lakh: Tax is deducted if the total value of the contract exceeds Rs.2.5/- Lakh, exclusive of taxes or cess levied under GST
    2. If the location of the supplier and the place of supply are in the same State/UT: Tax is deducted at 1% of the value, under each CGST (Central Goods & Service Tax) act / SGST (State Good & Service Tax) act / UTGST (Union Territory Goods & Service Tax) act.
    3. If the location of the supplier and the place of supply are in different States/UTs, without legislature: Tax is deducted at 2% as per the IGST (Integrated Good & Service Tax) act.
    4. If the location of the supplier and the registration of his/her business is in the same State/UT, without legislature: Tax is deducted at 2% as per the IGST (Integrated Good & Service Tax) act. 
    5. Advance paid for taxable goods and services on or before 01.10.2018.

Get your GST registration now

Tax not deducted on goods and service tax when;

  1. When payment made is less than or equal to Rs 2.5 Lakh:  Tax is not deducted at source for the supplier for payment made by the buyer in exchange for taxable goods or services.
  2. If the contract value of taxable supply is less than Rs.2.5/- Lakh: Tax is not deducted if the total value of the contract is less than Rs.2.5 Lakh.
  3. For exempted services: Central tax dated 28 June 2017, of notification No. 12/2017, lists the exempted services from TDS.
  4. For exempted goods: Central tax dated 28 June 2017, of notification No. 2/2017, lists the exempted goods from TDS.
  5. Non-taxable Goods: Goods such as alcoholic beverages, natural gas, diesel, petroleum, and aviation turbine fuel (ATF).
  6. Invoice issued after 1.07.2017: When an invoice is issued by the supplier for sale of goods after 1 July 2017 [Section 142(13)] tax is not deducted at source. However, the issue of any invoice before 1 July 2017 under the VAT Law, requires a deduction of tax.
  7. Location of the Supplier: If the location of the supplier and the place of supply are in a State/UT different from the State / UT where the supplier is registered. 
  8. Schedule III transactions: Every transaction mentioned under Schedule III of the CGST/SGST Acts 2017
  9. Tax invoice issued: A tax invoice issued before 1 October 2018, in accordance with a payment, tax is not deducted.
  10. Advance Payment: Any amount paid in advance, before 1 October 2018, where tax invoice issued on or after 1 October 2018, tax is not deducted at source.
  11. Tax paid on reverse charge: Where the tax is to be paid on reverse charge by the supplier or the person who pays the tax.
  12. Payment is made to an unregistered supplier: Tax is not deducted at source for payment made to a supply business that is unregistered.
  13. Cess Payments: Tax is not deducted at source for Cess payments

 

0

When is Tax deducted at source as per GST Law

748

Tax is deducted at source as per GST (Goods & Services Tax) law when payment made to a supplier exceeds Rs 2.5 Lakh for exchange of taxable goods or services. Additionally, this value is not inclusive of Central, State, or Union Territory/Integrated & Cess taxes or any other forms of tax collected under GST law. 

Other Conditions for TDS on GST

    1. If the contract value of taxable supply is greater than Rs.2.5/- Lakh: Tax is deducted if the total value of the contract exceeds Rs.2.5/- Lakh, exclusive of taxes or cess levied under GST
    2. If the location of the supplier and the place of supply are in the same State/UT: Tax is deducted at 1% of the value, under each CGST (Central Goods & Service Tax) act / SGST (State Good & Service Tax) act / UTGST (Union Territory Goods & Service Tax) act.
    3. If the location of the supplier and the place of supply are in different States/UTs, without legislature: Tax is deducted at 2% as per the IGST (Integrated Good & Service Tax) act.
    4. If the location of the supplier and the registration of his/her business is in the same State/UT, without legislature: Tax is deducted at 2% as per the IGST (Integrated Good & Service Tax) act. 
    5. Advance paid for taxable goods and services on or before 01.10.2018.

Get your GST registration now

Tax not deducted on goods and service tax when;

  1. When payment made is less than or equal to Rs 2.5 Lakh:  Tax is not deducted at source for the supplier for payment made by the buyer in exchange for taxable goods or services.
  2. If the contract value of taxable supply is less than Rs.2.5/- Lakh: Tax is not deducted if the total value of the contract is less than Rs.2.5 Lakh.
  3. For exempted services: Central tax dated 28 June 2017, of notification No. 12/2017, lists the exempted services from TDS.
  4. For exempted goods: Central tax dated 28 June 2017, of notification No. 2/2017, lists the exempted goods from TDS.
  5. Non-taxable Goods: Goods such as alcoholic beverages, natural gas, diesel, petroleum, and aviation turbine fuel (ATF).
  6. Invoice issued after 1.07.2017: When an invoice is issued by the supplier for sale of goods after 1 July 2017 [Section 142(13)] tax is not deducted at source. However, the issue of any invoice before 1 July 2017 under the VAT Law, requires a deduction of tax.
  7. Location of the Supplier: If the location of the supplier and the place of supply are in a State/UT different from the State / UT where the supplier is registered. 
  8. Schedule III transactions: Every transaction mentioned under Schedule III of the CGST/SGST Acts 2017
  9. Tax invoice issued: A tax invoice issued before 1 October 2018, in accordance with a payment, tax is not deducted.
  10. Advance Payment: Any amount paid in advance, before 1 October 2018, where tax invoice issued on or after 1 October 2018, tax is not deducted at source.
  11. Tax paid on reverse charge: Where the tax is to be paid on reverse charge by the supplier or the person who pays the tax.
  12. Payment is made to an unregistered supplier: Tax is not deducted at source for payment made to a supply business that is unregistered.
  13. Cess Payments: Tax is not deducted at source for Cess payments

 

0

FAQs

No FAQs found

Add a Question


No Record Found
SHARE
Senior Executive - Content in Vakilsearch