Under GST, the penalty for failure to comply with TDS (Tax Deducted at Source) compliances is governed by the provisions of the GST Act. The penalty provisions are applicable to both the deductor and the deductee.
Following details are
- Late Payment: If the deductor fails to deposit the TDS amount to the government by the due date, a late payment interest of 18% per annum will be levied. This interest will be calculated from the due date till the actual date of payment.
- Late Filing of TDS Return: If the deductor fails to file the TDS return within the due date, a late filing fee of Rs. 200 per day will be levied for each day of delay, subject to a maximum of the TDS amount.
- Non-Deduction of TDS: If the deductor fails to deduct the TDS amount from the payment made to the supplier, the deductor will be liable to pay the TDS amount along with interest at 18% per annum from the date when the TDS was supposed to be deducted till the actual date of deduction.
- Wrong Deduction or Short Deduction: If the deductor has deducted TDS at a rate lower than the prescribed rate or has deducted the wrong amount, the deductor will be liable to pay the balance amount along with interest at 18% per annum from the date when the TDS was supposed to be deducted till the actual date of deduction.
- Non-Payment of TDS Amount: If the deductor has deducted the TDS amount but fails to deposit it to the government, the deductor will be liable to pay the TDS amount along with interest at 18% per annum from the date when the TDS was supposed to be deposited till the actual date of deposit.
- Penalty for Non-Compliance: In addition to the above penalties, a penalty of Rs. 10,000 or the amount of TDS whichever is higher can be imposed by the tax authorities in case of non-compliance with TDS provisions.
It is important for the deductor to comply with the TDS provisions under GST to avoid penalties and interest.
