GST: TAX DEDUCTION AT SOURCE…
- January 8, 2016
- Posted by: Indirect Tax Professionals
- Category: Articles
1. Notwithstanding anything contained to the contrary in this Act, the Central or a State Government may mandate, –
- a department of the Central or State Government, or
- Local authority,
- Governmental agencies, or
- such category of entities as may be notified, by the Central or a State Government on the recommendations of the Council,
[hereinafter referred to in this section as the deductor], to deduct tax at the rate of one percent from the payment made or credited to the supplier [hereinafter referred to in this section as the deductee] of taxable goods and/or services, notified by the Central or a State Government on the recommendations of the Council, where the total value of such supply, under a contract, exceeds rupees ten lakhs.
Explanation – For the purpose of deduction of tax specified above, the value of supply shall be taken as the amount excluding the tax indicated in the invoice.
2. The amount deducted as tax under this section shall be paid to the credit of the appropriate Government by the deductor within ten days after the end of the month in which such deduction is made, in the manner prescribed.
3. The deductor shall furnish to the deductee a certificate mentioning therein the contract value, rate of deduction, amount deducted, amount paid to the appropriate Government and such particulars as may be prescribed in this behalf.
4. If any deductor fails to furnish to the deductee the certificate, after deducting the tax at source, within five days of crediting the amount so deducted to the appropriate Government, the deductor shall be liable to pay, by way of a late fee, a sum of rupees one hundred per day from the specified period until the failure is rectified
Provided that the amount of fee payable under this sub-section shall not exceed rupees five thousand.
5. The deductee shall claim credit, in his cash ledger, of the tax deducted and reflected in the return of the deductor filed under sub-section (7), in the manner prescribed.
6. Every deductor responsible for making deduction of tax under this section shall obtain a registration within the time specified and in the manner prescribed
Provided that where the deductor is already registered under this Act, no separate registration is required.
7. Every deductor shall, within the period specified, furnish a return in the form and manner prescribed.
8. Any deductor who fails to comply with the requirement under sub-section (6) and (7) shall be liable to pay a late fee of rupees one hundred per day from the day on which such requirement arose until the failure is rectified:
Provided that the amount of late fee payable under this sub-section shall not exceed rupees five thousand.
9. If any deductor fails to pay to the credit of the appropriate Government the amount deducted as tax under sub-section (1), he shall be liable to pay interest in accordance with the provisions of section 21 of the Act, in addition to the amount of tax deducted.
10. Recovery of the amount in default under this section shall be made in the manner specified in section 20 of this Act.
11. Refund to the deductor, arising on account of excess or erroneous deduction shall be dealt with in accordance with the provisions of section 22 of this Act.