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CA Intermediate · Taxation · Tax Deduction at Source and Collection of Tax at Source

Delhi Public Works Department (a government department) awarded a works contract to Sharma Constructions Pvt Ltd, a registered supplier in Delhi, for a taxable value of Rs 3,00,000 (excluding GST) for an intra-State supply. The contract value is above the threshold for TDS under GST. The department is liable to deduct TDS under CGST and SGST. What total TDS (CGST plus SGST) must be deducted?

The total TDS is Rs 6,000. For an intra-State supply the deductor deducts 1% under CGST and 1% under SGST on the taxable value excluding GST, so 2% of Rs 3,00,000 gives Rs 3,000 plus Rs 3,000.

  1. ARs 3,000
  2. BRs 6,000Correct
  3. CRs 9,000
  4. DRs 18,000

Explanation

TDS under GST is 1% under CGST and 1% under SGST, i.e. 2% in total, on the taxable value excluding GST. 2% of Rs 3,00,000 = Rs 6,000 (Rs 3,000 each). Rs 3,000 is wrong because it counts only the CGST half. Rs 9,000 uses 3%, and Rs 18,000 wrongly applies the GST rate of 6% per head.

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