TD/TCS provisions effective from 1st October, 2018
The Central Government vide Notification No. 50 /2018 –CT dated 13th September, 2018 has notified 1st October, 2018, as the date on which the provisions of section 51 (Tax deducted at source) will be effective with respect to a department of central/state Government, local authority, governmental agencies and notified persons as specified below:
- an authority or a board or any other body, -
- set up by an Act of Parliament or a State Legislature; or
- established by any Government,
with fifty-one per cent or more participation by way of equity or control, to carry out any function;
- Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860);
- Public sector undertakings.
Therefore, w.e.f 1st Oct, 2018, above notified persons are required to deduct TDS @1% each in case of intra state and 2% in case of interstate supply for total value of supply exceeding Rs. 2.5 Lacs under a contract and the amount so collected shall be paid to the Government by the deductor within 10 days after the end of the month in which such deduction is made.
Comments: TDS deposited will flow from Electronic Cash Ledger of Deductor to the Electronic Cash Ledger of the deductee by the process of GSTR-7 returns. Deductor will not need to be registered in every State but will be able to pass the amount deducted as CGST-SGST or as IGST into any State where the deductee is supplying from. The working of this form of flow of amount in GSTN will be very interesting to note.
Source:-IDT.ICAI
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