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Published on:
March 21, 2023
By
Harshini

Process of Acceptance of TDS Credit by Deductee under GST

Under the Goods and Services Tax (GST) regime, the deductor has to deduct Tax Deducted at Source (TDS) while making payment to the deductee. The deductee can claim the TDS credit in their electronic cash ledger, but the credit will only be available to them after the deductor has uploaded the TDS details in their Form GSTR-7.

The process of acceptance of TDS credit by the deductee under GST is as follows:

1. The deductor deducts TDS while making payment to the deductee.

2. The deductor uploads the TDS details in their Form GSTR-7, which includes details such as the GSTIN of the deductee, the amount of TDS deducted, and the date of payment.

3. The details of TDS uploaded by the deductor in their Form GSTR-7 will be reflected in the deductee's Form GSTR-2A.

4. The deductee can view the TDS details in their Form GSTR-2A and can accept or reject the details.

5. If the deductee accepts the TDS details, the TDS credit will be credited to their electronic cash ledger.

6. If the deductee rejects the TDS details, they need to inform the deductor about the rejection and ask them to make the necessary corrections.

7. The deductor can make the necessary corrections and upload the revised TDS details in their Form GSTR-7.

8. The revised TDS details uploaded by the deductor will be reflected in the deductee's Form GSTR-2A, and they can accept the revised details.

Once the TDS credit is credited to the deductee's electronic cash ledger, they can use the credit to pay their tax liabilities under GST. The deductee can also view their TDS credit balance in their electronic cash ledger and can download their TDS credit ledger from the GST portal.

What happens if the deductee rejects the TDS details uploaded by the deductor?

If the deductee rejects the TDS details uploaded by the deductor, they need to inform the deductor about the rejection and ask them to make the necessary corrections. The deductor can make the necessary corrections and upload the revised TDS details in their Form GSTR-7. The revised details uploaded by the deductor will be reflected in the deductee's Form GSTR-2A, and they can accept the revised details. It is important for the deductor to ensure that the TDS details are accurate and complete before uploading them in Form GSTR-7 to avoid rejection by the deductee.

Can the deductee claim TDS credit without the deductor uploading the TDS details in Form GSTR-7?

No, the deductee cannot claim TDS credit without the deductor uploading the TDS details in their Form GSTR-7. The deductor has to upload the TDS details to enable the deductee to claim the credit. The TDS credit will be credited to the electronic cash ledger of the deductee only after the TDS details are uploaded by the deductor in Form GSTR-7 and the deductee accepts the same.

Process of Acceptance of TDS Credit by Deductee under GST FAQs

Here are some frequently asked questions (FAQs) on the process of acceptance of TDS credit by deductee under GST:

Q: Can the deductee claim TDS credit without the deductor uploading the TDS details in Form GSTR-7?

A: No, the deductee cannot claim TDS credit without the deductor uploading the TDS details in their Form GSTR-7. The deductor has to upload the TDS details to enable the deductee to claim the credit.

Q: What happens if the deductor does not upload the TDS details in Form GSTR-7?

A: If the deductor does not upload the TDS details in Form GSTR-7, the deductee cannot claim the TDS credit. The deductee should inform the deductor to upload the TDS details as soon as possible.

Q: How long does the deductee have to accept the TDS details uploaded by the deductor?

A: The deductee has to accept the TDS details uploaded by the deductor before the due date of filing of Form GSTR-2 for the relevant tax period. If the deductee does not accept the TDS details before the due date, the credit will not be credited to their electronic cash ledger.

Q: What happens if the deductee rejects the TDS details uploaded by the deductor?

A: If the deductee rejects the TDS details uploaded by the deductor, they need to inform the deductor about the rejection and ask them to make the necessary corrections. The deductor can make the necessary corrections and upload the revised TDS details in their Form GSTR-7. The revised details uploaded by the deductor will be reflected in the deductee's Form GSTR-2A, and they can accept the revised details.

Q: Can the deductee use TDS credit to pay their tax liabilities under GST?

A: Yes, the deductee can use TDS credit to pay their tax liabilities under GST. Once the TDS credit is credited to the deductee's electronic cash ledger, they can use the credit to pay their tax liabilities under GST.

Q: Can the deductee download their TDS credit ledger from the GST portal?

A: Yes, the deductee can download their TDS credit ledger from the GST portal. They can view their TDS credit balance in their electronic cash ledger and can download their TDS credit ledger from the GST portal.

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