CMA Final · Indirect Tax Laws and Practice · TDS and TCS under GST
A State Government department, notified as a TDS deductor under GST, pays Rs 8,00,000 (excluding GST) to a registered supplier under a single contract for an intra-State supply of works. The invoice separately shows GST at 18%. What is the total TDS (CGST plus SGST) to be deducted?
The total TDS is Rs 16,000. For an intra-State supply, the deductor withholds 1% CGST plus 1% SGST, i.e. 2%, on the contract value excluding GST. Two percent of Rs 8,00,000 gives Rs 16,000, and the GST shown on the invoice is left out of the base.
- ARs 8,000
- BRs 16,000Correct
- CRs 18,880
- DRs 28,800
Explanation
TDS under GST is 2% in total (1% CGST plus 1% SGST for an intra-State supply), applied on the payment value excluding GST. 2% of Rs 8,00,000 = Rs 16,000. Rs 8,000 uses only one 1% component. Rs 18,880 wrongly includes GST in the base.
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