What will be the treatment of 2% TDS under GST in reverse charge mechanism on the part of vendor and vendee
Asked 1 month ago in GST from Kolkata, West Bengal
- No TDS is required to be deducted in case of RCM.
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There is no requirement of tds deduction in case of RCM.
CBDT has clarified through Circular No. 23/2017 that if GST on services has been indicated separately in the invoice, then no tax would be deducted on GST component.
There is no need to deduct TDS in a reverse charge mechanism
I am confused if you are talking about tds under income tax or TDS under GST?
if you are talking about TDS under income tax it won't be deducted on GST amount be it on reverse charge or forward charge.
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2℅ TDS is required to be deducted under gst if the contract value is above 2.5 lakh
Out of this 1℅ would be towards cgst and 1℅ would be towards sgst.
This needs to be deducted over and above gst that you are going to charge.
I think its unfair because in some cases 3 things would be applicable say in cass of rent gst+TDS in gst+ TDS in income tax would be applicable.
In reverse charge, TDS is deducted on amount exclusive of GST. TDS is not deducted on the GST amount.
No TDS required in reverse charge mechanism.