Deductors in GST Collections

 Deductors in GST Collections

-Dr. Lalit Kumar

More the collection, more the economic growth by utilizing the collected revenues for development of the State / UT. No doubt, the collection of Central Government will automatically increase, if deductors play their roles fairly. How the GST Act is becoming milestone in the Economic Development today? How Deductors are playing crucial role in increasing collections? How Financial Management is playing its role in making a developed nation?

When to deduct TDS on GST?

As per Section 51, it is the duty of Government Agencies (Deductor) or any other person notified in this regard, to deduct ‘Tax Deduction at Source (TDS)’ 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 Rs. 250000/- (Rs. two lakh and fifty thousand).

What to do after deduction TDS on GST?

The TDS on GST is deposited by creating Challan on the portal of GST. The amount can be transferred through NEFT to RBI or using Cheque to be deposited in the authorized banks using Challan generated from the portal of GST. All Drawing and Disbursing Officers (DDOs) are playing crucial role by registering themselves as GSTIN Deductor on the portal of GST and processing the payments of TDS on GST on time.

Further, it is required to file a return known as GSTR-7 by the deductor by 10^th of the following month giving the details of deductions and deductees. After submission of the return, the amount of TDS on GST be reflected in the GSTIN of supplier.

Even the deductor requires to issue a certificate to the deductee mentioning therein the contract value, rate of deduction, amount deducted, etc. known as GSTR-7A.

Penalties Provisions for non-compliance by DDOs:

It is required to deduct TDS on GST on certain transactions and thereafter pay the same by using GST Challan. In case, the DDO fails to make payment of the amount deducted as TDS on GST, it is required to pay the tax with interest u/s 50 (1) and 51 (6).

After deposit of TDS on GST, it is required to furnish the GSTR-7 by due date, in case, the DDO fails to furnish the GSTR-7 on within due date; then late fee is required to be paid by the DDO. The late fee will be Rs. 100 per day on CGST and Rs. 100 per day on SGST. Maximum late fee can be up to Rs. 5000 in CGST and Rs. 5000 in SGST.

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