Circular No. ES/220/2018-19 September 19, 2018
To: Members of the Council
Sub.: Guidelines for Deductions and Deposits of TDS by the DDO under GST
We would like to inform you that Central Board of Indirect Taxes and Customs (CBIC) has issued guidelines for the deduction and deposit of TDS by the DDOs (Drawing & Disbursing Officer) under GST vide Circular No. 65/39/2018- DOR dated 14th September, 2018.
In this connection, the Council had earlier issued Circular No.ES/209/2018-19 dated September 14, 2018 wherein CBIC had notified that the provisions relating to Tax Deducted at Source (TDS) which shall be applicable w.e.f. 1st October, 2018, and Circular No.ES/210/2018-19 dated September 14, 2018 wherein CBIC had notified the provisions relating to Tax Collected at Source (TCS) which shall be applicable w.e.f. 1st October, 2018.
As per the CGST Act 2017, every deductor shall deduct the tax amount from the payment made to the supplier of goods or services or both and deposit the tax amount so deducted with the Government account through NEFT to RBI or a cheque to be deposited in one of the authorized banks, using challan on the common portal. In addition, the deductors have entrusted the responsibility of filing return in FORM GSTR-7 on the common portal for every month in which deduction has been made based on which the benefit of deduction shall be made available to the deductee. All the DDOs in the Government, who are performing the role as deductor have to register with the common portal and get the GST Identification Number (GSTIN).
The circular suggests two options for payment process of Tax Deduction at Source. They are, Individual Bill-wise Deduction and its Deposit by the DDO and – Bunching of deductions and its deposit by the DDO. In the first option, the DDO will have to deduct as well as deposit the GST TDS for each bill individually by generating a CPIN (Challan) and mentioning it in the Bill itself.
In the second option, the DDO will have to deduct the TDS from each bill, for keeping it under the Suspense Head. However, deposit of this bunched amount from the Suspense Head can be made on a weekly, monthly or any other periodic basis.
For more information regarding the payment process, members may kindly refer to Circular No. 65/39/2018- DOR dated 14th September, 2018.