TDS Payment under GST: This TDS is different from TDS under Income Tax Act. If a transaction is covered under bth GST Act and Income Tax Act, both the decusions are required. Obviously, separate payments, separate returns and separate TDS certificates are required. Check out more details for Faq’s on TDS Payment under GST Regime.

TDS Payment under GST

How can I discharge my TDS liability?

TDS liability can be discharged by debiting of Electronic Cash Ledger only at the time of filing return in FORM GSTR 7.

Payment is made in respect of a single contract whose value of taxable supply is Rs.3.5 Lakh. Two bills amounting to Rs 1.5 lakh & Rs. 2 lakh respectively are passed for such payment. Since in respect of both the bills the amount paid does not exceed Rs. 2.5 lakh, I think that no tax is required to be deducted. Am I right?

No. Here the payments are being made against a single contract value of taxable supply exceeding Rs.2.5 Lakh. Here, the value of taxable supply in the contract is Rs. 3.5 lakh. So, the deductor should deduct TDS on each payment to the supplier in respect of the aforesaid contract.

When will a DDO know that his liability for payment has been completed?

Electronic cash Ledger of the DDO will be credited when tax deducted at source is deposited in Government account. Payment of such liability (which is the tax deducted at source) shall have to be done by debiting of the electronic cash Ledger and such debit can be done while submitting FORM GSTR 7. So, unless the return in FORM GSTR 7 is submitted the payment liability of the DDO will not be completed.


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Can the deductee take action on the TDS credit declared by me?

After filing of return by deductors (DDOs) in FORM GSTR-7, the amount so deducted will be auto-populated in ‘TDS/TCS credit receipt’ table of respective suppliers. The supplier (deductee) has to accept or reject the amount so auto-populated in the table after logging on the portal. The accepted amount will be credited to Electronic cash ledger while rejected amount will be autopopulated in Amendment table of next month’s FORM GSTR-7 of the deductor.

What will happen if the TDS credit entry is rejected by the deductee?

The rejected transactions in ‘TDS/TCS credit receipt’ table will be communicated back to the deductor who will download the auto-populated transactions and make necessary amendments in GSTIN or amount etc. in table 4 of FORM GSTR-7. The amended details will again be autopopulated in ‘TDS/TCS credit receipt” table. Supplier will take action comprising Accept/Reject the transactions. As usual, amount of accepted invoices will be credited to electronic cash ledger of the supplier.

Is there any provision of refund to the deductor or the deductee arising on a/c of excess or erroneous deduction made under GST?

The refund to the deductor or the deductee arising on account of excess or erroneous deduction shall be dealt with in accordance with the provisions of section 54. Further no refund to the deductor shall be granted, if the amount deducted has been credited to the electronic cash ledger of the deductee.

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