Setup for GST TDS and GST TCS
This topic explains the requirement and the process of setting up GST TDS and GST TCS.
GST TDS
As per Section 51 of CGST Act, recipient of goods and services shall deduct TDS of 2% on payment amount where contract amount exceeds INR 250000. The recipient will issue a certificate for the tax amount deducted against the payment made for contract to supplier. Recipient will pay the deducted amount to government and the same is reflected in supplier’s electronic ledger entry, which the supplier can further adjust against liability.
GST TCS
As per Section 52 of CGST Act, 2017, every e-commerce operator is required to collect tax at the rate of 1% (0.5% of CGST and 0.5% of SGST for intra state supply or 1% of IGST on interstate supply) on the net value of taxable supplies provided the supplier is supplying goods or services through e-commerce operator (online market place) and consideration with respect to the supply is to be collected by the said e-commerce operator The taxable supplies includes total sales and returns. The GST TCS amount collected by e-commerce operator shall be paid to GSTIN and the same will be reflected as available credit for supplier in their electronic cash ledger that can be utilized to setoff liability. Corrections are allowed before GST TCS amount is paid to GSTIN by e-commerce operator. Hence, there will not be any refund or negative credit. If refund of payment is to be paid by supplier to e-commerce operator then, full amount (without GST TCS) shall be considered. GST TCS to be calculated on Invoice amount excluding GST. The Credit Memo amount excluding GST should be deducted from Invoice amount for the period before calculating GST TCS. GST TCS can be calculated for a given period, which can be week, fortnight or a month. GST TDS is applicable only for Registered Suppliers The calculation of GST TCS is provided on Bank or Cash Payment and Receipt Vouchers.
To set up GST TDS/TCS
This setup is required for calculation of GST TDS and GST TCS on payment to vendor or receipt from customer.
Choose the
icon, enter Tax Type-> GST TDS TCS-> Action -> Tax Rates, and then choose the related link.Fill in the fields as described in the following table.
Field Description GST TDS TCS Type Specify the relevant type, for example: TDS, TCS. GST Effective Date Specify the effective date. CGST Specify the relevant percentage for component CGST. SGST Specify the relevant percentage for component SGST. IGST Specify the relevant percentage for component IGST.