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Circular No. 65/39/2018-DOR
F.No.S.31011/11/2018-ST-I-DoR
Government of India
Ministry of Finance
Department of Revenue
***
New Delhi, Dated the 14th September, 2018
To,
1. Secretaries of the Central Ministries as pe list enclosed.
2. Chief Secretaries of all States/UTs with legislature/ UTs without
Legislature.
3. All Finance Secretaries/ CCTs of the States/ UTs with Legislature/UTs
without Legislature.
4. Chairman CBIC /All Principal Chief Commissioners/ Chief
Commissioners/ Principal Commissioners/ Commissioners of Central Tax
(through Member, GST, CBIC)
5. Pr.Chief Controller of Accounts, CBIC.
Madam/Sir,
Subject: Guidelines for Deductions and Deposits of TDS by the DDO
under GST
Section 51 of the CGST Act 2017 provides for deduction of tax by the
Government Agencies (Deductor) or any other person to be notified in this regard,
from the payment made or credited to the supplier (Deductee) of taxable goods
or services or both, where the total value of such supply, under a contract, exceeds
two lakh and fifty thousand rupees. The amount deducted as tax under this section
shall be paid to the Government by deductor within ten days after the end of the
month in which such deduction is made alongwith a return in FORM GSTR-7
giving the details of deductions and deductees. Further, the deductor has to issue
a certificate to the deductee mentioning therein the contract value, rate of
deduction, amount deducted etc.
2. As per the Act, 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 are entrusted the responsibility of filing
return in FORM GSTR-7 on the common portal for every month in which
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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).
3. The subject section which provides for tax deduction at source was not
notified to come into force with effect from 1
st
July, 2017, the date from which
GST was introduced. Government has recently notified that these provisions shall
come into force with effect from 1
st
October, 2018, vide Notification No. 50/2018
– Central Tax dated 13th September, 2018.
4. For payment process of Tax Deduction at Source under GST two options
can be followed, which are as under:
Option I: Generation of challan for every payment made during the month
Option II: Bunching of TDS deducted from the bills on weekly, monthly or any
periodic manner
5. In order to give effect to the above options from 01.10.2018, a process flow
of deduction and deposit of TDS by the DDOs has been finalised in consultation
with CGA for guidance and implementation by Central and State Government
Authorities. The process flow for Option I and Option II are described as under:
Option I - Individual Bill-wise Deduction and its Deposit by the DDO
6. In this 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.
7. Following process shall be followed by the DDO in this regard:
(i) The DDO shall prepare the Bill based on the Expenditure Sanction.
The Expenditure Sanction shall contain the (a) Total amount, (b) net
amount payable to the Contractor/Supplier/Vendor and (c) the 2%
TDS amount of GST.
(ii) The DDO shall login into the GSTN Portal (using his GSTIN) and
generate the CPIN (Challan). In the CPIN he shall have to fill in the
desired amount of payment against one/many Major Head(s)
(CGST/SGST/UTGST/IGST) and the relevant component (e.g. Tax)
under each of the Major Head.
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(iii) While generating the CPIN, the DDO will have to select mode of
payment as either (a) NEFT/RTGS or (b) OTC. In the OTC mode,
the DDO will have to select the Bank where the payment will be
deposited through OTC mode.
(iv) The DDO shall prepare the bill on PFMS (in case of Central Civil
Ministries of GoI), similar payment portals of other
Ministries/Departments of GoI or of State Governments for
submission to the respective payment authorities.
(v) In the Bill,
(a) the net amount payable to the Contractor; and
(b) 2% as TDS
will be specified
(vi) In case of NEFT/RTGS mode, the DDO will have to mention the
CPIN Number (as beneficiary’s account number), RBI (as
beneficiary) and the IFSC Code of RBI with the request to payment
authority to make payment in favour of RBI with these credentials.
(vii) In case of the OTC mode, the DDO will have to request the payment
authority to issue ‘A’ Category Government Cheque in favour of one
of the 25 authorized Banks. The Cheque may then be deposited
along with the CPIN with any of branch of the authorized Bank so
selected by the DDO.
(viii) Upon successful payment, a CIN will be generated by the
RBI/Authorized Bank and will be shared electronically with the
GSTN Portal. This will get credited in the electronic Cash Ledger of
the concerned DDO in the GSTN Portal. This can be viewed and the
details of CIN can be noted by the DDO anytime on GSTN portal
using his Login credentials.
(ix) The DDO should maintain a Register as per proforma given in
Annexure ‘A’ to keep record of all TDS deductions made by him
during the month. This Record will be helpful at the time of filing
Monthly Return (FORM GSTR-7) by the DDO. The DDO may also
make use of the offline utility available on the GSTN Portal for this
purpose.
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(x) The DDO shall generate TDS Certificate through the GST Portal in
FORM GSTR-7A after filing of Monthly Return.
Option II - Bunching of deductions and its deposit by the DDO
8. Option-I may not be suitable for DDOs who make large number of
payments in a month as it would require them to make large number of challans
during the month. Such DDOs may exercise this option wherein 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.
9. Following process shall be followed by the DDO in this regard:
(i) The DDO shall prepare the Bill based on the Expenditure Sanction.
The Expenditure Sanction shall contain the (a) Total amount, (b) net
amount payable to the Contractor/Supplier/Vendor and (c) the 2%
TDS amount of GST.
(ii) The DDO shall prepare the bill on PFMS (in case of Central Civil
Ministries of GoI), similar payment portals of other
Ministries/Departments of GoI or of State Governments for
submission to the respective payment authorities.
(iii) In the Bill, it will be specified
(a) the net amount payable to the Contractor; and
(b) 2% as TDS
(iv) The TDS amount shall be mentioned in the Bill for booking in the
Suspense Head (8658 - Suspense; 00.101 - PAO Suspense; xx – GST
TDS)
(v) The DDO will require to maintain the Record of the TDS so being
booked under the Suspense Head so that at the time of preparing the
CPIN for making payment on weekly/monthly or any other periodic
basis, the total amount could be easily worked out.
(vi) At any periodic interval, when DDO needs to deposit the TDS
amount, he will prepare the CPIN on the GSTN Portal for the
amount (already booked under the Suspense Head).
(vii) While generating the CPIN, the DDO will have to select mode of
payment as either (a) NEFT/RTGS or (b) OTC. In the OTC mode,
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the DDO will have to select the Bank where the payment will be
deposited through OTC mode.
(viii) The DDO shall prepare the bill for the bunched TDS amount for
payment through the concerned payment authority. In the Bill, the
DDO will give reference of all the earlier paid bills from which 2%
TDS was deducted and kept in the suspense head. The DDO may
also attach a certified copy of the record maintained by him in this
regard.
(ix) The payment authority will pass the bill by clearing the Suspense
Head operated against that particular DDO after exercising
necessary checks.
(x) In case of NEFT/RTGS mode, the DDO will have to mention the
CPIN Number (as beneficiary’s account number), RBI (as
beneficiary) and the IFSC Code of RBI with the request to payment
authority to make payment in favour of RBI with these credentials.
(xi) In case of the OTC mode, the DDO will have to request the payment
authority to issue ‘A’ Category Government Cheque in favour of one
of the 25 authorized Banks. The Cheque may then be deposited
along with the CPIN with any of branch of the authorized Bank so
selected by the DDO.
(xii) Upon successful payment, a CIN will be generated by the
RBI/Authorized Bank and will be shared electronically with the
GSTN Portal. This will get credited in the electronic Cash Ledger of
the concerned DDO in the GSTN Portal. This can be viewed and the
details of CIN can be noted by the DDO anytime on GSTN portal
using his Login credentials.
(xiii) The DDO should maintain a Register as per proforma given in
Annexure ‘A’ to keep record of all TDS deductions made by him
during the month. This Record will be helpful at the time of filing
Monthly Return (FORM GSTR-7) by the DDO. The DDO may also
make use of the offline utility available on the GSTN Portal for this
purpose.
(xiv) The DDO shall file the Return in FORM GSTR-7 by 10
th
of the
following month
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(xv) The DDO shall generate TDS Certificate through the GSTN Portal
in FORM GSTR-7A
10. Departments in Central Government should instruct all its DDOs under
them to follow the above procedure for payment of GST TDS amount deducted
from payments to be made to suppliers.
11. Difficulty, if any, in implementation of this circular may please be brought
to the notice of Department of Revenue.
(Ritvik Pandey)
Joint Secretary to the Government of India
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Annexure A
Record to be maintained by the DDO for filing of GSTR7
Sl. No. GSTIN of
the
Deductee
Trade
Name
Amount
paid to the
Deductee
on which
tax is
deducted
Integrated
Tax
Central
Tax
State/UT
Tax
Total
