• Question on GST refund

Hi - 
I have applied for GST refund ( Unutilized ITC ) . I carry business involving Import Software service.
I pay IGST on Basic and TDS part. ( Reverse Charge Mechanism )


For example I paid 100 INR to foreign company for availing their service.

I paid 18 % on 100 INR 

+ 18% on 10 INR TDS amount (say 10 INR TDS paid to Income tax department )
Total Taxable value = 100+10 =110 .

GST office saying department will only refund IGST paid on 100 INR only.


But As I know IGST should be paid on TDS ( income tax TDS ) part also.

if possible, can you please give some Supporting LINK - Judicial cases Ref if you agree.
I need to submit it tomorrow .

Thank you in advance
Asked 3 years ago in GST

You are making the transaction very confusing because you are paying the TDS yourself rather than deducting it from the value of supply and GST also needs to be paid on value of supply and since your invoice value is 100 they would refund GST on invoice value.

How are you claiming refund of such GST what services are you providing?

Why are you deducting TDS? Have you checked whether it is required or not.

 

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
4265 Answers
96 Consultations

5.0 on 5.0

Hi

 

Firstly, TDS should have been 11 and not 10 by grossing up method.

 

There are no case rulings as such under GST regime.

In my opinion, GST shall have to be paid on actual payment + TDS. Since rcm has to be paid on the transaction value and transaction value would include TDS.

 

Kindly draft a proper submission. We may assist you with the same.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

You need to do reverse calculation and GST shall have to be paid on total taxable value.

 

We may assist you in proper submission.

 

It is advisable to take a phone consultation for detailed discussion. 

 

 

Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

Hello,

 

Under the GST regime, the withholding tax(TDS) will be liable to be subjected to GST. 

I hope this answer satisfies your requirements.

 

Regards,

CA Hunny Badlani

Hunny Badlani
CA, Madhya Pradesh
2608 Answers
16 Consultations

5.0 on 5.0

Hi

The amount of tds will be added for gst calculation so you need to do reverse calculation because gst is payable on total taxable value.

Karishma Chhajer
CA, Jodhpur
2450 Answers
29 Consultations

5.0 on 5.0

- Actual import is of Rs.100. I think you are grossing up and bearing TDS from your pocket and the client is getting actual amount of invoice i.e. Rs.100. In such case, GST is payable on Rs.100 only. Grossing up is according to income tax. You are also required to pay GST on Rs.100 only.

Vivek Kumar Arora
CA, Delhi
4825 Answers
1030 Consultations

5.0 on 5.0

Then show the value of supply as the value plus TDS amount and don't represent it as gst on TDS amount.

Naman Maloo
CA, Jaipur
4265 Answers
96 Consultations

5.0 on 5.0

Yes, you can show the value of supply as value plus tds amount. 

Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

Yes 

You can show the total amount as value of supply no need to show separate amount of gst on tds

Karishma Chhajer
CA, Jodhpur
2450 Answers
29 Consultations

5.0 on 5.0

Yes, you can show the total amount, Incl. TDS, as the value of supply. 

Hunny Badlani
CA, Madhya Pradesh
2608 Answers
16 Consultations

5.0 on 5.0

- It is a debatable issue. There are case laws which are in your favour as well as department.

Vivek Kumar Arora
CA, Delhi
4825 Answers
1030 Consultations

5.0 on 5.0

Yes, that's correct.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

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