Rate & Value of supply for deduction of TDS - GST Ready Reckoner - GST

Rate Value of supply for deduction of TDS Rate of deduction of tax The different nature of supply Rate of deduction Nature of Supply Name of TDS Rate Tax of Location of the Supplier Place of supply is in the same State /UT without any legislature CGST 1% SGST/UTGST 1% Location of the Supplier Place of supply are in the different States IGST 2% Valuation of supply for deduction of TDS and applicable rates with illustrations: For the purpose of deduction of TDS, the value of supply shall exclude the taxes leviable under GST (i.e. Central tax , State tax , UT tax , Integrated tax Cess). Thus, no tax shall be deducted on Central tax , State tax , UT tax , Integrated tax and cess component levied on supply. No deduction of tax and cess should also be made on the value of exempted goods or services or both even if the exempt and taxable supply are billed together. NOTE: Suppose three separate contracts for supply are given to M/S ABC by the Health Department of the Government of West Bengal and the value of taxable supply is below Rs.2.5 Lakh in case of each contract though their combined value is more than Rs.2.5 Lakh; in such case no deduction is required to be made since value of taxable supply in neither of the contract exceeds Rs. 2.5 Lakh. Examples of various situations requiring determination of value of supply for deduction of tax Example 1: Supplier is registered and contract value is excluding GST Supplier X makes taxable supply worth Rs. 10,000/ to a Municipality where contract for supply is for Rs.15,00,000/-.The rate of GST is 18%. Supplier and the deductor are in the same State. Following payment is being made by this Municipality to X, Rs. 10,000 (value of Supply) + Rs 900 (Central Tax) + Rs 900 (State Tax). Value of supply = Rs.10,000/- Tax to be deducted from payment: Central Tax = 1% on Rs.10,000/= Rs. 100 ; State Tax = 1% on Rs.10,000/ = Rs. 100/- Payment due to X after TDS as per GST provisions: Rs. 11,600/- Example 2 :- Supplier is registered and contract value is inclusive of GST Supplier Y of Mumbai makes taxable supply worth Rs. 10,000/- exempted supply worth Rs. 20,000/- in an invoice/bill of supply to Finance Deptt. of GoI located in New Delhi where contract for supply is for Rs.6,00,000/- (Rs.2,60,000 for taxable supply including GST and Rs.3,40,000 for exempted supply). The rate of GST is 18%. Following payment is being made by GoI to Y: Rs.10,000/- (value of taxable Supply) + Rs.1,800 (Integrated Tax) + Rs.20, 000/- (value of exempted Supply). Whether any deduction of tax is required? Value of taxable supply in the contract = Rs.2,60, 000/- (including GST) Value of such contract excluding tax= 2,60,000x100/118= Rs.2,20,340/- Since, the value of taxable supply in the contract does not exceed Rs.2.5 Lakh, deduction of tax is not required. Example 3:- Supplier is registered under composition scheme Supplier ZA is a person registered under the composition scheme in Jharkhand who makes taxable supply worth Rs.10,000/ to a Local Authority of Jharkhand where value of taxable supply under the contract is for Rs.2,55,000/-. Following payment is being made by the Local Authority of Jharkhand to ZA: Rs.10, 000/- Value of taxable supply under the contract is Rs.2,55,000/ which is more than Rs.2.5 Lakh and hence deduction of tax is required.