Section 51 - TDS under GST:
Section 51 of the Central Goods and Services Tax (CGST) Act, 2017 pertains to the provisions related to Tax
Deduction at Source (TDS). Here are the key points to remember about Section 51:
Applicability:
The provisions of Section 51 apply to certain notified entities such as governmental departments, local
authorities, Governmental Agencies, and other notified persons.
These entities are required to deduct tax at source from the payment made to a supplier of goods or
services if the value of the supply is above a certain threshold limit.
Threshold limit:
The threshold limit for TDS is Rs.2.5 lakhs, meaning that if the value of the supply is above this amount,
TDS is applicable.
TDS rate and calculation:
The TDS rate is generally 1% under each Act (effective 2%) of the value of the goods or services
supplied, and it is deducted by the buyer at the time of making payment to the supplier.
The TDS amount is calculated on the amount paid or payable to the supplier, excluding the tax amount.
Deposit and issue of certificate:
The TDS amount deducted by the buyer is required to be deposited to the government within 10 days
from the end of the month in which the deduction was made.
The buyer is also required to issue a TDS certificate to the supplier within 5 days of depositing the TDS
amount.
The TDS certificate issued to the supplier must contain details such as the amount of TDS, the GSTIN
of the supplier and buyer, and other prescribed details.
If the certificate is not issued within 5 days, the late fee of Rs.100 shall be applicable.
TDS credit and return:
The supplier can claim the TDS amount as a credit against their GST liability while filing their GST
returns.
The TDS amount credited to the supplier will be reflected in their electronic cash ledger, which can be
used to offset their GST liability.
The buyer who has deducted the TDS amount is required to file a TDS return in Form GSTR-7,
containing details of the TDS deducted and deposited.
Illustration:
Suppose a Governmental Health department, procures goods worth Rs.5 lakhs + GST @ 18% on it from a
supplier, XYZ Pvt Ltd.
Here, since the value of the supply exceeds the threshold limit of Rs.2.5 lakhs, the Department is required to
deduct TDS at the rate of 2% on the amount payable to the supplier.
TDS = 5,00,000*2% = Rs. 10,000.
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Net Amount Payable to supplier = Value of Goods + GST – TDS amount
= 5,00,000 + 90,000 – 10,000
= 5,80,000
Section 52 - TCS under GST:
Section 52 of the Central Goods and Services Tax (CGST) Act, 2017 pertains to the provisions related to Tax
Collection at Source (TCS). Here are the key points to remember about Section 52:
Applicability:
The TCS provisions apply to e-commerce operators registered under GST other than Agents and
facilitate the supply of goods or services through their platform.
TCS rate and calculation:
The TCS rate is generally 1% of the net value of taxable supplies made through the e-commerce
platform.
Deposit and issue of certificate:
The TCS amount collected by the e-commerce operator is required to be deposited to the government
within 10 days from the end of the month in which the collection was made.
The e-commerce operator is also required to issue a TCS certificate to the supplier within 5 days of
depositing the TCS amount.
The TCS certificate issued to the supplier must contain details such as the amount of TCS, the GSTIN
of the supplier and buyer, and other prescribed details.
TCS credit and return:
The supplier can claim the TCS amount as a credit against their GST liability while filing their GST
returns.
The TCS amount credited to the supplier will be reflected in their electronic cash ledger, which can be
used to offset their GST liability.
The e-commerce operator who has collected the TCS amount is required to file a TCS return in Form
GSTR-8 by the 10th of the next month in which the tax was collected, containing details of the TCS
collected and deposited.
Additionally, Every Operator who collects the amount, shall furnish the annual statement before 31 st
December following the end of such financial year.
Illustration:
Suppose an e-commerce operator, say XYZ Online Pvt Ltd, facilitates the sale of goods worth Rs.80 lakhs on its
platform by a seller, ABC Traders.
As an e-commerce operator, XYZ Online Pvt Ltd is required to collect TCS at the rate of 1% on the net value of
taxable supplies made by ABC Traders through its platform.
TCS = 80,00,000*1% = Rs. 80,000.
The net amount payable to ABC traders = 80,00,000 – 80,000 = 79,20,000.
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