Sushil Modi Committee Recommends TDS Provisions Under GST

When GST was introduced last year, many sceptics seemed surprised by its complex framework. However, a year later, the GST has undergone a cosmetic makeover of some sort. While petrol and diesel are still outside the GST ambit, a few major changes promise radical relief for taxpayers. With TDS norms set to be implemented by October, we could see a more robust and efficient GST finally in place. The recommendation was made in a meeting presided by Mr Sushil Kumar Modi who also happens to be the  Chairman of the Council for addressing the issues related with the current state of GST. The TDS procedure would be implemented in a phase-wise manner. Mr Modi also confirmed that the TDS system will first be introduced on big construction departments such as roads and irrigation projects related to large contractors.

Some key takeaways of the Saturday meeting include:

Many Categories will Attract TDS

GST subsumes central, stated and integrated taxes. GST has provisions for TDS deduction for payments against supply of goods or services to registered business or agencies of varied categories. The tax amount is deposited with the government. The TDS provisions under GST were ineffective till September 30 for different reasons. However, the Committee led by Mr Sushil Modi plans to introduce it in October this year to check GST misuses. Following authorities will have the right to collect TDS:

• Center or State Departments
• Local bodies, Government agencies, or Enterprises
• Some registered business or professional groups

No Loss for Traders/Businessmen

TDS deduction will not harm the person who supplies goods or services. Business owners/traders can claim an input tax credit on the same while filing returns or pay other taxes.

TDS Terms and Conditions

• TDS has to be deposited with the government within ten days of TDS filing.
• TDS is not applicable in cases where the place of recipients is different from the origin of supply and supplier.
• Technology to detect Tax Evasion

Technology remains the backbone of GST. Powered by the Infosys Software, Tax evaders on the GST network will be identified. Mr Sushil Modi further confirmed that during the filing of GSTR 3B and GSTR 1, a large number of tax evaders have already been identified.

E-Way Bill powered by Chips

On the lines of states like Maharashtra and Uttar Pradesh, carrier vehicles will be fitted with electronic chips for monitoring and surveillance purpose. State borders will be equipped with sensor cameras which would further enable on the spot offenders of E-Way bill.

Increase in Turnover Limit of Composition Scheme

To benefit small traders and composition scheme users, the turnover limit under the composition scheme could be increased to 1.5 crores. The earlier threshold limit was 1 crore.

Finally, GST gets Good and Simple

Against the earlier average of 37 monthly returns, taxpayers will now need to file only 13 monthly returns. About 80% of the registered dealers under GST now can file returns in just three lines. The Good and Service Tax it seems is on the track to becoming good and simple.