Tax Deduction at Source under GST its Refund (GST TDS)

Tax deduction at source (TDS) is a mechanism through which the government collects tax from the taxpayer on their behalf. Under the Goods and Services Tax (GST) regime, TDS is applicable on certain supplies made by the supplier. The purpose of GST TDS is to ensure that the government receives tax revenue in a timely and efficient manner. In this article, we will give you a quick analysis of TDS under GST and how to claim a refund for it. TDS under GSTAs per the GST law, TDS is required to be deducted by the deductor (a person or entity who is making payment to the supplier) at the time of making payment to the supplier.

TDS is applicable to the following supplies:

1. Rent paid for immovable property exceeding Rs. 50,000 per month.

2. Services provided by a government department or entity.

3. Services by a local authority.

4. Services by an individual, HUF or partnership firm to a specified person (i.e., a person notified by the government).

5. Services by an e-commerce operator to an e-commerce participant.

TDS is deducted at the rate of 2% (1% CGST + 1% SGST/UTGST) or 2% (2% IGST) depending on the nature of the supply. The amount deducted as TDS is required to be deposited with the government within 10 days from the end of the month in which TDS was deducted.Refund of GST TDSIf the supplier has GST liability, the TDS amount deducted by the deductor can be utilized to discharge the GST liability. However, if the TDS amount is more than the GST liability of the supplier, the supplier can claim a refund of the excess amount.The refund of GST TDS can be claimed by the supplier by filing an application in Form GST RFD-01 on the GST portal. The application must be filed within two years from the end of the financial year in which the TDS was deducted.

The application for refund must be accompanied by the following documents:

1. Copy of the GST return filed by the supplier.

2. TDS certificate issued by the deductor.

3. Bank statement showing the credit of TDS amount.

After filing the refund application, the officer will process the application and verify the documents submitted. If the officer is satisfied with the claim, the refund amount will be credited to the bank account of the supplier.

Conclusion

TDS under GST is a mechanism to ensure timely and efficient collection of tax revenue by the government. If the TDS amount is more than the GST liability of the supplier, the supplier can claim a refund of the excess amount. The refund process is simple and can be done by filing an application on the GST portal.In this article, we have given a quick analysis of TDS under GST and how to claim a refund for it. TDS under GST is applicable on certain supplies made by the supplier. TDS is deducted at the rate of 2% or 2% depending on the nature of the supply. If the TDS amount is more than the GST liability of the supplier, the supplier can claim a refund of the excess amount.