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

Which of the following statements about the credit of tax deducted at source under GST is correct for the deductee (supplier)?

The tax deducted at source is credited to the supplier's electronic cash ledger once the supplier accepts the deductor's return details. It is not placed in the credit ledger and is not refunded automatically, so the supplier can use it to pay tax liability.

  1. AThe amount deducted is credited to the deductee's electronic cash ledger on acceptance of the deductor's return detailsCorrect
  2. BThe amount deducted is credited to the deductee's electronic credit ledger
  3. CThe amount is refunded to the deductee by the department within 7 days
  4. DThe deductee cannot use the amount until the end of the financial year

Explanation

The tax deducted is credited to the deductee's electronic cash ledger when the deductee accepts the details furnished by the deductor in the return in GSTR-7. It is not credited to the credit ledger, and it is not automatically refunded.

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