What are the Duties of Deductor under GST

Duties of Deductor under GST TDS

Under the Goods and Services Tax (GST) regime, Tax Deducted at Source (TDS) is an important compliance mechanism to ensure the smooth and efficient collection of taxes. TDS is a system in which the tax liability is deducted at the source of payment itself, and the remaining amount is paid to the recipient. The person who deducts TDS is called the ‘deductor’, and they have certain duties and responsibilities to fulfill. In this article, we will discuss the duties of the deductor under GST TDS.

1. Registration for TDS: The first duty of a deductor is to obtain a TDS registration under GST. The deductor should apply for registration within 30 days from the date on which he becomes liable to deduct TDS. The registration can be obtained by filing Form GST REG-07 on the GST portal.
2. Deduction of TDS: The deductor should deduct TDS from the payment made to the supplier, where the total value of such supply exceeds Rs. 2.5 lakhs (excluding GST). The rate of TDS is notified by the government, and it can vary for different goods and services.
3. Issue TDS certificate: After the deduction of TDS, the deductor should issue a certificate to the supplier within 5 days from the date of deduction. This certificate should contain details such as the name and address of the deductor, name and address of the supplier, GSTIN of both parties, and the amount of TDS deducted.
4. Payment of TDS: The deductor should deposit the TDS amount with the government by the 10th of the following month in which the deduction was made. The TDS amount can be deposited by generating a challan on the GST portal. The challan should be generated in the name of the deductor.
5. Filing of TDS return: The deductor should file a TDS return in Form GSTR-7 on a monthly basis by the 10th of the following month in which the deduction was made. The TDS return should contain details such as the name and address of the deductor, GSTIN of the deductor, GSTIN of the supplier, amount of TDS deducted, and the amount of TDS paid.
6. Record keeping: The deductor should maintain all the records related to TDS deduction and payment for a period of 72 months from the last date of the financial year in which such transactions were undertaken.
7. Issuance of TDS credit to supplier: The amount of TDS deducted by the deductor should be credited to the supplier’s electronic cash ledger, and the supplier can use this amount for the payment of tax. The credit should be reflected in the supplier’s electronic cash ledger on a real-time basis.

Conclusion:

TDS is an important mechanism for the collection of taxes under GST, and the deductor has certain duties and responsibilities to fulfill. The deductor should ensure timely deduction, payment, and filing of TDS returns, as well as maintain proper records related to TDS. Any non-compliance with TDS provisions can lead to penalties and interest, so it is important for the deductor to understand and fulfill their duties under GST TDS.