The Central Board of Indirect Taxes and Customs ( CBIC ) has laid down a standard operating procedure on the Tax Deduction at Source ( TDS ) under the Goods and Services Tax ( GST ) regime as the TDS provisions are to be implemented from Monday.
As per the procedure, Tax is required to be deducted from the payment made / credited to a supplier, if the total value of supply under a contract in respect of supply of taxable goods or services or both, exceeds Rs. 2,50,000/- (Rupees two lakh and fifty thousand). This value shall exclude the taxes ie, Central Tax, State Tax and integrated Tax leviable under GST.
As per the procedure, TDS must be deducted on the following situations.
a) Total value of taxable supply ≤ Rs. 2.5 Lakh under a contract.
b) Contract value > Rs. 2.5 Lakh for both taxable supply and exempted supply, but the value of taxable supply under the said contract ≤ Rs. 2.5 Lakh.
c) Receipt of services which are exempted.
d) Receipt of goods which are exempted.
e) Goods on which GST is not leviable.
f) Where a supplier had issued an invoice for any sale of goods in respect of which tax was required to be deducted at source under the VAT Law before 01.07.2017, but where payment for such sale is made on or after 01.07.2017 [Section 142(13) refers].
g) Where the location of the supplier and place of supply is in a State(s)/UT(s) which is different from the State / UT where the deductor is registered.
h) All activities or transactions specified in Schedule III of the CGST/SGST Acts 2017, irrespective of the value.
i) Where the payment relates to a tax invoice that has been issued before 01.10.2018.
j) Where any amount was paid in advance prior to 01.10.2018 and the tax invoice has been issued on or after 01.10.18, to the extent of advance payment made before 01.10.2018.
k) Where the tax is to be paid on reverse charge by the recipient i.e. the deductee.
l) Where the payment is made to an unregistered supplier. m) Where the payment relates to “Cess” component.
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