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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How GST is Destination Based Tax

 How GST is Destination Based Tax

-Dr. Lalit Kumar Setia

The Goods and Services Tax Collection is more in the state where goods and services are consumed in more quantity and amount. Higher the consumption, higher the GST benefit to the State Government. How it is possible?

Illustration:

Suppose Mr. A, resident of Haryana purchased goods from M/s ABC Limited located in Haryana. The M/s ABC Limited will levy GST on goods and Mr. A will have to pay GST included in the MRP of the Goods. The collection of GST (i.e. CGST and SGST) will be paid to the Central Government and Haryana Government respectively. Take another example, suppose Mr. A is the resident of Delhi and M/s ABC Limited of Haryana supplied goods to Mr. A. Then M/s ABC Limited will levy IGST on goods and Mr. A will have to pay IGST included in the MRP of the goods. The Collection of IGST will be paid on the portal of GST by the M/s ABC Limited. In such case, the place of consumption will decide the State that will collect the tax. The IGST paid by M/s ABC Limited will be divided between Centre and Delhi. The Haryana which produces the goods will get nothing in the GST collection.

The GST is destination based Consumption based tax. Hence, the place of consumption will decide the State that will collect the tax. The State Governments which are promoting consumption with full billing without stealing of tax are getting maximum benefit from the GST.

Destination Based Tax on Consumption:

It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.

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Duties of DDOs in Taxation Matters

Duties of DDOs in Taxation Matters  

 Introduction:

In the Financial Year 2020-21, the new regime of income tax rates be available as an option to the taxpayers. Why Government brought this new regime as an option? After analysing the data it was found that during last two decades due to a great number of deductions and exemptions available to the taxpayers, instead of 62% rise in the number of individuals filing income tax returns; there was only 22% rise in number of individuals paying income taxes. Rest 40% increased return filers were able to prove 'nil' tax liability.  It's easy to detect the wrong deductions and exemptions claimed by the salaried individuals because their incomes are credited in their bank accounts but in case of self-employed and businessmen, it is very difficult. Therefore, this option is provided to easily curb the wrong practices of non-salaried individuals.

In Government Departments, a Drawing and Disbursing Officer (DDO) is responsible to ensure the compliance of taxation laws and he is expected to not only submit the tax returns but also to guide and suggest other officers for taking care of various provisions of taxation. The DDO adopts participatory approach and include Accounts Section to enforce the taxation rules. The Government ensure the compliance of financial rules, taxation rules through DDOs. The workshops are generally organized on taxation issues. There are three types of major duties related with taxation matters:

(i) Income Tax Return (ITR):

Who should file Income Tax Return and How:

The DDOs are expected to guide the Government employees with regard to accurate procedure of filing Income Tax Return. Most of the Government employees are salaried individuals, in case their salaries and other incomes exceed Rs. 2,50,000 (Basic Exemption Limit); it becomes mandatory to file Income Tax Return by 31^st July of the Assessment Year. The Income Tax Return can easily be filed either is physically mode or electronic mode. The individuals with total income less than 5 Lacs can file their return in physical form by downloading the Income Tax Return Form from website of Income Tax Department i.e. incometaxindia.gov.in.

Filing of Income Tax Return:

Go to http://incometaxindia.gov.in/ and open the menu ‘Forms/Downloads’ and click upon ‘Income Tax Returns’. Thereafter, download Income Tax Return-1 and its instructions provided along with it. Even if the total income becomes equal or more than 5 Lacs, an individual should download this form and fill it as a preliminary work before filing Income Tax Return in electronic mode. Thereafter, in case of income less than Rs. 5 Lacs, the form may also be submitted in the Income Tax Department. For individuals with income more than Rs. 5 Lacs, it is required to fill the same details by accessing the website https://www.incometaxindiaefiling.gov.in/

Type of Income Tax Return Forms:

Every DDO should be equipped with the knowledge of various types of Income Tax Return Forms i.e. ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7.

Income Tax Return Form No. ITR-1:

This form is suitable only for individuals being a resident (other than not ordinarily resident) having total income up to Rs. 50 lacs, having Income from Salaries, one house property, other sources (Interest etc.), and agricultural income up to Rs.5 thousand. The Government employees who have ownership of more than one house property or who have ownership of agricultural land with agriculture income more than Rs. 5000 should not file Income Tax Return Form No. 1. They should file Income Tax Return Form No. 2.

Income Tax Return Form No. ITR-2:

The ITR Form No. 2 is for Individuals and HUFs not having income from profits and gains of business or profession. This form is used only if an individual’s sources of incomes are only Salary but also house property or capital gains. In case, the individual is also earning from business or profession, then he should file Income Tax Return Form No. 3.

Income Tax Return Form No. ITR-3:

The ITR Form No. 3 is for individuals and HUFs having income from profits and gains of business or profession.

Income Tax Return Form No. ITR-4:

This form is suitable only for Individuals, HUFs and Firms (other than LLP) being a resident having total income up to Rs.50 lacs and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE

Income Tax Return Form No. ITR-5:

This form is not filed by individuals. It is suitable for persons other than, - (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7.

Income Tax Return Form No. ITR-6:

This form is suitable for Companies other than companies claiming exemption under section 11.

Income Tax Return Form No. ITR-7:

This form is suitable only for persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only.

(ii) Tax Deduction at Source:

A Drawing and Disbursing Officer is also ‘Tax Deductor’ on behalf of Income Tax Department and he is also required to take Tax Deductor’s Account Number (TAN) from the Income Tax Department. Thereafter, he should register on https://tdscpc.gov.in/ with the TAN Number by clicking upon ‘Register as a new user’.

As per the provisions of Income Tax Act, 1961, the DDOs are responsible for tax deduction at source on specified types of payments made by the Government offices. The tax deducted at source should not be less than its requirement and it should be deposited in the Income Tax Department through using appropriate form and thereafter the details of the same should be submitted within the prescribed time. Apart from DDOs, the electronic TDS (e-TDS) return is also required to be filed by Companies, Persons required to get their accounts audited u/s 44AB of the Income Tax Act, 1961; and the deductors reporting more than 20 deductee records for any quarter of the financial year. The Government of India prepared and operate an integrated platform for providing various services to deductors known as TRACES (TDS Reconciliation Analysis and Correction Enabling System). The DDOs and Deductors can easily view the status of challans and TDS-TCS credit for a PAN on this portal. They can also download Conso File, Form 16 / 16A and Justification Report from this portal.

(iii) Goods and ServicesTax:

Every Drawing and Disbursing Officer should be aware of Section 51 of Goods and Services Tax Act 2017 and get registered as a deductor under the Act. Whenever a payment is made or credited to a supplier of taxable goods or/and services it is required to deduct Tax Deduction at Source on GST.

TDS on GST:

As per section 24(vi) of GST Act, a DDO will register himself by using TAN Number at the portal of GST i.e. www.gst.gov.in, and in case, he enters into a contract for purchase of goods or/and services with total value of taxable supply (excluding GST) more than Rs. 2.5 Lacs; he will deduct TDS on GST @2%. After deducting the TDS on GST, the same will be paid to the Government within 10 days after the end of the month in which deduction was made. Thereafter, he will also submit return in the Form GSTR-7 and furnish system generated TDS certificate in Form GSTR-7A to the deductee within 5 days of crediting payment of TDS to the Government (i.e. date of furnishing GSTR-7).

Penalties may be levied upon DDOs under GST:

In case, a DDO fails to make payment of deducted tax within prescribed time limits, he will have to pay the same along with interest imposed by the GST portal at the time of depositing payment of deducted tax with delay.

In case he failed to furnish Form GSTR-7 within 10 days after the end of the month in which deduction was made; late fees will be payable under section 47(1) i.e. Rs. 100 + Rs. 100 per day (maximum up to Rs. 5000) under each CGST and SGST means upto Rs. 10000.

In case he failed to furnish Form GSTR-7A; late fees will be payable under section 51(4) i.e. Rs. 100 + Rs. 100 per day (maximum up to Rs. 5000) under each CGST and SGST means upto Rs. 10000.

Further, in case, an excess payment of GST is deducted by mistake; a refund may be claimed by the DDO or Deductee as the case may be. However, in case excess tax gets credited to the deductee then the DDOs shall not be granted the refund.

*Copyright © 2019 Dr. Lalit Kumar. All rights reserved.

You might also be interested in the following:

Introduction to Income Tax Matters

Advance Tax and How to Avoid Interest on Advance Tax

Implications on Income Tax on Formation and Dissolution of Hindu Undivided Family

Payment and Status of Income Tax

Income Tax Return

Tax Deduction at Source

Tax Planning to Have More Take-Home Salary

Tax Deduction at Source for Deductors

How to save money from being covered under taxes (Tax Saving Options)?

Tier I and II Accounts of NPS

Tax Saving Under Section 80C

Tax Deduction Under Section 80C

11 Must Claim Exemptions and Deductions

Important Questions on Goods and Services Tax

Important Questions on Good and Services Tax (GST)

By Dr. Lalit Kumar Setia |  @drlalitsetia  |  drlalitsetia@gmail.com  |  November 15, 2017 6:33 p.m. PST

1. जीएसटी के प्रकार है?

→ तीन (SGST, CGST, IGST)

2. सर्वप्रथम जीएसटी बिल का प्रारूप तैयार करने वाली समिति के अध्यक्ष थे?

→ असीम दास गुप्ता

3. जीएसटी बिल पर राज्यसभा तथा लोकसभा ने क्रमशः पारित किया?

→ 3 अगस्त तथा 8 अगस्त 2016

4. जीएसटी की दरें है?

→ पाँच (0%, 5%, 12%, 18%, 28%)

5. 28% दर वाली वस्तुओं का कुल प्रतिशत है?

→ 19%

6. जीएसटी बिल पर राष्ट्रपति ने अपनी मंजूरी दी?

→ सितंबर 2016.

7. संविधान के किस अनुच्छेद के तहत जीएसटी परिषद् का गठन किया गया है?

→ अनुच्छेद-279(A)

8. जीएसटी पंजीकरण संख्या में कुल डिजिट है?

→ 15

9. जीएसटी चोरी करने पर कितने वर्ष के लिए कारावास का प्रावधान है?

→ पाँच वर्ष

10. जीएसटी परिषद् में सम्मलित कुल सदस्यों की संख्या है?

→ 33

11. भारत का वह राज्य जहाँ जीएसटी अन्त में लागू हुआ?

→ जम्मू-कश्मीर

12. जीएसटी लागू करने वाला विश्व का पहला देश था?

→ फ्रांस (1954)

13. वह संविधान संशोधन जिसके तहत जीएसटी पारित किया गया?

→ 122वाँ (101वाँ )

14. भारत में वस्तु एवं सेवा कर (जीएसटी) लागू कर दिया गया?

→ 1 जुलाई 2017 से

15. भारत में जीएसटी लागू करने का सुझाव दिया था?

→ विजय केलकर समिति ने

16. जीएसटी में समाहित कुल अप्रत्यक्ष कर तथा अधिभार (सेस) की संख्या क्रमशः है?

→ 17 अप्रत्यक्ष कर तथा 23 अधिभार

17. जीएसटी बिल को सर्वप्रथम पारित करने वाला राज्य है?

→ असम

18. राज्यों को जीएसटी से होने वाले नुकसान का कितने वर्षों तक केंद्र 100% भरपाई करेगा?

→ पाँच वर्ष

19. जीएसटी लागू होने के बाद जीडीपी में कितने प्रतिशत वृद्घि का अनुमान लगाया गया है?

→ 2%

20. जीएसटी किस प्रकार का कर है?

→ अप्रत्यक्ष, बहुस्तरीय, गंतव्य आधारित

21. वे प्रमुख वस्तुएँ तथा सेवाएँ जो जीएसटी के दायरे से बाहर है?

→ शराब व पेट्रोलियम वस्तुएँ तथा शिक्षा व स्वास्थ्य सेवाएँ

*Copyright © 2018 Dr. Lalit Kumar. All rights reserved.

You might also be interested in reading the following:

1. Corruption and Governance - Tools in the hands of Ruler 2. Important Questions on Goods and Services Tax 3. Advance Tax and How to Avoid Interest on Advance Tax 4. Tax Planning to Have More Take-Home Salary 5. Decisions of Prime Minister Narendra Modi and Impact on Life of Common Man 6. Implications on Income Tax on Formation and Dissolution of Hindu Undivided Family