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TMI BlogDeduction of Tax at Source (TDS) in respect of works contractors and suppliersX X X X Extracts X X X X X X X X Extracts X X X X ..... by the State and Central GST levied and collected by the Centre and these two components of GST i.e. SGST and CGST would be applicable on all intra-State (within the State) supplies of goods and services on the same taxable value of such supply. However, the inter-State supplies of goods and/or services would attract Integrated Goods and Services Tax (IGST) levied and collected by the Centre. Under the old VAT law, the Drawing Disbursing Officers (DDOs) of various Central and State Government departments and establishments were required to deduct tax at source in respect of conventional sale/supply of goods, execution of works contract and lease transactions. Post introduction of GST, umpteen numbers of queries have been received f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder VAT. A contractor (having TIN) could pay 15% tax on the taxable turnover of goods, that is, after excluding labour component and other prescribed deductions from gross turnover which is the composite price consideration for both material and labour component. Alternatively , a contractor could opt for composition scheme (by registering under GRN) and pay 5% lump sum tax on the entire/gross value of works contract without any deduction for labour and other charges. Section 47(1) of the Assam VAT Act provides for deduction of tax at source by every person under the control of Government, while making any payment for execution of a work contract, as per the rates specified in the Fifth Schedule appended to the VAT Act. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lays down that where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under the Assam Value Added Tax Act, 2003 and has also issued an invoice for the same before the introduction of GST i.e. before 01/07/2017, no deduction of tax at source under section 51 of the GST Act shall be made by the deductor under the said section where payment to the said supplier is made on or after the appointed day i.e. 01/07/2017. Now in the light of the above provisions, the matter relating to TDS in respect of works contract has been examined and following clarifications are issued: (a) Works Contract executed up to 30/06/2017 and the bills/invoices etc. also have been raised on or before 30/06/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gime): In case of works contract, which were partially executed on or before 30/06/2017 (during VAT period), there can be two situations: (i) Bills/invoices were raised before GST: TDS will be made as per provision of the VAT Act, as mentioned in para (a) above. (ii) Bills/invoices were raised after GST: TDS will be made as per provision of the GST Act, as mentioned in para (b) above. In case of works contract, which are partially executed on or after 01/07/2017 (during GST period) and invoices are raised during GST regime and payments are received during GST period, since the transaction was not accounted for under VAT, TDS will be made as per provision of the GST Act, as mentioned in para (b) above. (B) SUPPLY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment to the supplier is made on or after the date of introduction of GST i.e. on or after 01/07/2017, no deduction of tax at source (TDS) under section 51 of the GST Act shall be made by the deductor. Now in the light of the above provisions, the matter relating to TDS on supply of goods or services has been examined and following clarifications are issued: (a) Supply of goods made upto 30/06/2017 and the bills/invoices etc. also have been raised on or before 30/06/2017 (during VAT period) but the payment is pending or made on or after 01/07/2017: In respect of such payment, deduction of tax at source will be made as per the provisions of section 47(3) of the Assam VAT Act at the rates specified in the Schedules appended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egime) : In case of supplies of goods, which were partially made on or before 30/06/2017 (during VAT period), there can be two situations: (i) Bills/invoices were raised before GST: TDS will be made as per provision of the VAT Act, as mentioned in para (a) above relating to supply of goods or services. (ii) Bills/invoices were raised after GST: TDS will be made as per provision of the GST Act, as mentioned in para (b) above relating to supply of goods or services. In case of supplies partially made on or after 01/07/2017 (during GST regime), and invoices are raised during GST regime and payments are received during GST period, TDS will be made as per provision of the GST Act, as mentioned in para (b) above, relating to s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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