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)
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
3
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.
(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.
Record to be maintained by the DDO for filing of
GSTR7
|
Sl. No.
|
GSTIN of
|
Trade
|
Amount
|
Integrated
|
Central
|
State/UT
|
Total
|
|
|
the
|
Name
|
paid to the
|
Tax
|
Tax
|
Tax
|
|
|
|
Deductee
|
|
Deductee
|
|
|
|
|
|
|
|
|
on which
|
|
|
|
|
|
|
|
|
tax is
|
|
|
|
|
|
|
|
|
deducted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source :yogesh tiwaritcs/CBECCircular No. 65/39/2018-DOR
