The GST tax deduction at source is a mechanism for tracking the transaction of supplies of goods and/or services, allowing recipients of such supplies to deduct a portion of the amount paid to the supplier of those goods and/or services. In such cases, the supplier will consider the deducted amount and pay the balance tax to the government. This article summarises one of the most important points under GST, ie the GST TDS and GST TDS return due date which parties involved in the transactions must follow.
What is GST TDS return?
Tax Deducted at Source is a tax collected by the Government of India at the time a transaction is made. The tax must be deducted when money is credited to the payee’s account or when payment is made, whichever is earlier.
TDS return is a quarterly statement submitted to the IT department. Deductors must file their TDS returns on time. The following information is required to file a TDS return.
- PAN card of the deductor and deductee
- Amount of tax paid to the government
- TDS challan information
- Others, if any
List of TDS
TDS Rate Chart for FY 2023-24
|Section||Nature of Payment||Threshold (Rs.)||Individual / HUF TDS Rates (%)||OthersTDS Rate (%)|
|192||Salaries||Rs. 2,50,000||Slab Rates||Slab Rates|
|192A||Premature EPF withdrawal||Rs. 50,000||10%||10%|
|193||– TDS on interest on securities||Rs. 10,000||10%||10%|
|194||Payment of dividend||Rs. 5,000||10%||10%|
|194A||Interest issued by banks or post offices on deposits||Rs. 40,000Rs. 50,000 (For senior citizens)||10%||10%|
|194A||Interest by others apart from on securities||Rs. 5,000||10%||10%|
|194B||Amounts that someone has won through lotteries, puzzles, or games||Aggregate of Rs. 10,000||30%||30%|
|194BB||Amounts that someone has won from horse races||Rs. 10,000||30%||30%|
|194C||Payments to contractor or sub-contractor – Single Payments||Rs. 30,000||1%||2%|
|194C||Payments to contractor/sub-contractor – Aggregate Payments||Rs. 1,00,000||1%||2%|
|194D||Payment of insurance commission to domestic companies||Rs. 15,000||NA||10%|
|194D||Payment of insurance commission to companies other than domestic ones||Rs. 15,000||5%||NA|
|194DA||Maturity of Life Insurance Policy||Rs. 1,00,000||5%||5%|
|194EE||Payment of an amount standing to the credit of an individual under NSS (National Savings Scheme)||Rs. 2500||10%||10%|
|194F||Payment of repurchase of unit by UTI (Unit Trust of India) or any mutual fund||No Limit||20%||20%|
|194G||Payments or commission on sale of lottery tickets||Rs. 15,000||5%||5%|
|194H||Commission or brokerage||Rs. 15,000||5%||5%|
|194I||Rent of land, building, or furniture||Rs. 2,40,000||10%||10%|
|194I||Rent of plant and machinery||Rs. 2,40,000||2%||2%|
|194IA||Payment for transfer of immovable property other than agricultural land||Rs. 50,00,000||1%||1%|
|194IB||Rent payment that is made by an individual or HUF not covered under payment 194I||Rs. 50,000 (per month)||5%||NA|
|194IC||Payment that are made under Joint Development Agreement (JDA) to Individual/HUF||No Limit||10%||10%|
|194J||Fees paid for professional services||Rs. 30,000||10%||10%|
|194J||Amount paid for technical services||Rs. 30,000||2%||2%|
|194J||Amounts paid as royalty for sale/distribution/exhibition of cinematographic films||Rs. 30,000||2%||2%|
|194K||Payment of income for units of a mutual fund, for example- dividends||Rs. 5,000||10%||10%|
|194LA||Payment made for compensation for acquiring certain immovable property||Rs. 2,50,000||10%||10%|
|194LB||Payment of interest on infrastructure bonds to Non-Resident Indians||NA||5%||5%|
|194LBA(1)||Certain income distributed by a business trust among its unit holder||NA||10%||10%|
|194LD||Payment of interest on rupee-denominated bonds, municipal debt security, and government securities||NA||5%||5%|
|194M||Amounts paid for contract, brokerage, commission or professional fee (other than 194C, 194H, 194J)||Rs. 50,00,000||5%||5%|
|194N||In case cash withdrawal over a certain amount takes place from the bank, and ITR is filed||Rs. 1,00,00,000||2%||2%|
|194N||In case cash withdrawal takes place from a bank and one does not file ITR||Rs. 20,00,000||2%||2%|
|194O||Amount paid for the sale of products/services by e-commerce service providers via their digital platform||Rs. 5,00,000||1%||1%|
|194Q||Payments made for the purchase of goods||Rs. 50,00,000||0.10%||0.10%|
|194S||TDS on the payment of any crypto or other virtual asset||NA||1%||1%|
|206AA||TDS for non-availability of PAN||NA||At a rate higher of|
Specified rate as per the act
Rate in force
|206AB||TDS on non-filers of Income tax return||NA||Rate higher of:|
Twice the mentioned rate in provision
Rate in force
What is the due date for payment of GST TDS?
The due date for the payment of TDS is the 10th day of the next month in form GSTR-7.
For instance, if the ‘X’ department of the Central Government deducts TDS @2% from ‘Y’ on 3 November 2022, then it has to make payment by 10 December 2022.
When GST TDS is required to be deducted?
TDS @ 2% (1% CGST+1% SGST or 2% IGST) is deductible from payments to suppliers of taxable goods or services if the value of such supply under a contract exceeds Rs. 2.5 lakh rupees.
The Rs. 2.5 lakh limit applies to a single contract, not the total value in a month or year. So an individual supply can be less than Rs. 2,50,000/- but if the contract amount exceeds Rs. 2,50,000/-, TDS must be deducted.
The following shall be excluded from the calculation of the contract value:
- Central GST
- State GST
- Union Territory GST
- Integrated GST
How is TDS calculated on GST?
For a better understanding of TDS provisions, consider the following example.
The selling price of 10 Tablet @ Rs. 10,000/- per tablet (Taxable Value)- Rs. 1,00,000
If the rate of tax (CGST) on the Tablet is 28%
CGST @ 14% – Rs. 14,000
SGST @ 14 % – Rs. 14,000
Total Invoice Value – Rs. 1,28,000
TDS deduction will be
TDS calculated on taxable value = Rs. 1,00,000/-
TDS rate in GST = 1% of (CGST) and 1% of (SGST)
Calculation made excluding the tax amount (Rs. 1,28,000 – Rs. 28,000)
In the given example, the TDS calculation will be
Rs. 1,00,000 x 1 % = Rs. 1,000 (CGST)
Rs. 1,00,000 x 1%. = Rs. 1,000 (SGST)
What are the payment dates for GST 2022?
The payment due dates for GST 2022 are as follows:
|Taxpayer||GST TDS return due date|
|Regular||20th day of the next month|
|Composition scheme||18th day of the next month of quarter|
|Non- Resident||20th day of next month|
|Input Service Distributor||13th day of next month|
|TDS deductor||10th day of next month|
|TCS deductor||10th day of next month|
What is the due date for TDS return FY 2022-23?
The due date for TDS returns FY 2022-23 are:
|Quarter||Quarter period||Quarter Ending||Due date|
|1st Quarter||April – June||30th June||31st July 2022|
|2nd Quarter||July – September||30th September||1st October 2022|
|3rd Quarter||October – December||31st December||31st Jan 2020|
|4th Quarter||January – March||31st March||1st May 2023|
The due date for filing TDS returns for the second quarter of Financial Year 2022-23 is extended from 31st October 2022 to 30th November 2022.
What are GSTR 2A and 2B?
GSTR-2A is an automated generated dynamic tax return for purchases. This form retrieves information from the GSTR-1, which means it retrieves details of goods and/or services purchased in a specific month from the GSTR-1 form.
GSTR-2A is automatically generated from the counterparty/sellers’ returns as follows:
GSTR-1 – a regular taxpayer’s return.
GSTR-5 – non-resident taxable person.
GSTR-6- return from an input service distributor.
GSTR-7- tax deductor’s return
Form GSTR-8- e-commerce operator who is in charge of tax collection.
It also contains information on the importation of goods and the delivery of goods from SEZ units/developers.
GSTR-2B reflects eligible and ineligible ITCs each month. Same as GSTR-2A, but does not change the specified period. The statement is automatically generated on the 14th of the following month.
What is GSTR 1A?
A registered taxpayer can update the information on sales and outward supplies on a GSTR-1 that has already been filed by using the GSTR-1A form. If changes are proposed in GSTR-2A, each taxpayer will be required to submit GSTR-1A, which will be completed automatically.
Conditions to generate GSTR-1A
GSTR-1A is generated only when the recipient in GSTR 2 or GSTR 4 or GSTR 6 performs any of the following actions:
- Rejects the supplier`s addition of details, then sends the return
- Changes the supplier’s details and then submits the return
- Adds any new information that the supplier overlooked and then submits the return
In addition to the aforementioned condition, the supplier will only receive the details from the GSTR 1A return if the following criteria are met:
- GSTR 2 or GSTR 4 or GSTR 6 return is submitted on or before the 17th of the month.
- The supplier has not generated GSTR 3 or filed it.
- The supplier has not submitted GSTR-1A.
How to file GSTR 7?
The GSTR 7 form includes eight tables that detail the tax deducted.
The steps are outlined below.
GSTIN: When a return is filed, the taxpayer`s Goods and Services Tax Identification Number (GSTIN) is automatically added to GSTR-2A.
Legal name of the Deductor: The legal name of the Deductor is auto-populated in this section. Every registered person’s trade name can be auto-populated by logging into the GST Portal.
Trade Name: If applicable, the Deductor’s company name.
TDS details: This section contains details regarding the tax amount. It will include the GSTIN, total amount, and TDS amount of the deductee. The tax due will be divided into three components (CGST, SGST, and IGST).
Changes to TDS information for any previous tax period: You can correct any errors in the data provided in earlier returns by entering the original and revised details in this section.
Tax deduction at source and paid: The amount of tax deductes and the amount of tax paid to the government are both detailed in this section.
Interest, late fee payable and paid: If there are interest or late fees, they will be shown in this section along with the amount already paid.
Refund claimed from electronic cash ledger: This section contains details about any refunds for TDS payments from the electronic cash ledger. Specify bank account to receive the TDS refund.
TDS/Interest payment debit entries in electronic cash ledger: The entries in this section are auto-populated after filing the return and paying the TDS and interest.
Who can file GST TDS return?
The TDS provisions give the central government the authority to require the following individuals to deduct tax at source:
- A government organization (central or state)
- Local authority
- Governmental organizations
- The government notified categories of people
- PSUs (public sector undertakings)
- A society formed by the Central or State Governments or a Local Authority and society registered under the Societies Registration Act of 1860,
- An authority, board, or other body established by Parliament, a State Legislature, or a government, with the government owning 51% of the equity (control).
How to claim GST TDS?
Steps to claim TDS online are:
1. Log in or register at Income tax portal.
2. Fill in the mandatory fields on the applicable Income Tax Return (ITR) form.
3. Portal generates confirmation message after receiving ITR.
4. Enter OTP to verify the acknowledgement.
What is the penalty for GST nil return?
The penalty for GST nil return:
Intra-state ( within state ) supplies – Rs. 20 per day for a month (CGST of Rs.10 per day + SGST of Rs.10 per day)
Inter-state ( outside state) supplies – Rs.20 per day for a month (IGST of Rs.20 per day)
The maximum late penalty is Rs.5,000
Frequently Asked Questions(FAQs)
What if GST returns are not filed for 1 year?
If a taxpayer fails to file monthly returns for a year, the concerned GST officer may cancel the taxpayer’s GST registration.
Is it mandatory to file GST TDS nil return?
It is not mandatory to file GST TDS nil return.
Is TDS applied on GST?
TDS is deducted from the taxable value and not from the GST amount
Can we claim a GST TDS refund?
Yes, you can claim a GST TDS refund. Excess amounts deducted and credited to government accounts are subject to refund under section 54 of the CGST Act 2017.
Is GST annual return mandatory?
GST annual return is not mandatory for small businesses having a turnover of less than Rs. 2 crores.
Governments sometimes extend GST TDS due dates due to difficulties for taxpayers in adapting to new GST rules and regulations. A late filing fee of Rs. 200 per day is chargeable if the TDS return is not filed on the due date. To file TDS on date, connect with the GST expert at InstaFiling.
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