Central Board of Direct Taxes (CBDT) has clarified about deduction of TDS on tax amount charged under GST.
Earlier, under the Service Tax regime, it was clarified vide Cicular No 1/2014 dated 13.01.2014 that “wherever Service Tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Income Tax Act, 1961 (the Act) on the amount paid or payable without including such Service Tax component.”
Hence, under GST also, it has been clarified (by way of amending the above-mentioned circular) by the Board (CBDT) that “wherever in terms of the agreement or contract between the payer and the payee, the component of ‘GST on services’ comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid or payable without including such ‘GST on services’ component. GST for these purposes shall include Integrated Goods and Services Tax, Central Goods and Services Tax, State Goods and Services Tax and Union Territory Goods and Services Tax.”
Clarification – No TDS on GST (Tax Amount)
Published On - July 20, 2017
