TDS under GST New changes from 10 October 2024 | TDS on Metal Scrap | New changes of GSTR-7

Summary

This video discusses significant changes in the GST system, particularly focusing on the applicability of TDS (Tax Deducted at Source) under GST. It highlights the addition of a new category of persons responsible for TDS deductions starting from October 10, 2024, especially concerning metal scrap transactions. The video also covers updates on GST returns, with a focus on the mandatory filing of GSTR 7 every month, and the introduction of new provisions related to the electronic cash ledger. Furthermore, the presenter elaborates on changes to input tax credit claims, penalties, and important notifications for businesses to stay compliant.

Takeaways

• 😀 TDS (Tax Deducted at Source) provisions under GST have been updated, with significant changes starting from October 10, 2024.
• 😀 The Government added new categories of persons who are now required to deduct TDS under GST, including registered persons buying metal scrap from unregistered suppliers.
• 😀 Section 51 of the GST Act governs TDS provisions, and the scope now includes additional categories such as government agencies and public sector undertakings.
• 😀 A new notification (No. 25/2024) includes metal scrap transactions in the list of supplies where TDS is applicable if both the buyer and seller are registered under GST.
• 😀 TDS will be deducted at the rate of 1% CGST and 1% SGST for metal scrap transactions as per the First Schedule of the Customs Tariff Act, provided the contract value exceeds ₹2,50,000.
• 😀 GST returns, particularly GSTR 7 (TDS return), must now be filed by the 10th of each month, a mandatory requirement introduced by a recent government notification.
• 😀 A waiver of late fees for GST returns, particularly for GSTR 7, was announced for returns due from June 2021 onwards, provided they are filed on time.
• 😀 If GST TDS or TCS (Tax Collected at Source) is deducted, it will be credited to the recipient's electronic cash ledger, and refunds can be claimed on it.
• 😀 GST provisions now require additional compliance for TDS deductors, ensuring that they file returns on time and pay the due TDS without delay.
• 😀 A significant change in GST filing procedures includes considering Form 2B-based input tax credit reconciliation in GSTR 9 for the financial year 2023-24, effective December 31, 2024.

Q & A

What is the recent change regarding GST TDS provisions?

The recent change introduced a new category under GST TDS provisions, specifically for metal scrap transactions. From October 10, 2024, registered persons buying metal scrap from another registered person must deduct GST TDS at the rate of 1% CGST and 1% SGST.

How does the new GST TDS rule affect metal scrap transactions?

If a registered person buys metal scrap from another registered person, the buyer is now required to deduct GST TDS. This applies to transactions falling under Chapter 72 to 81 of the Customs Tariff Act, as mentioned in the First Schedule.

When do the new GST TDS rules come into effect?

The new GST TDS rules, including the changes for metal scrap transactions, come into effect from October 10, 2024.

How are TDS and TCS credits handled under GST?

The TDS and TCS credits are transferred to the electronic cash ledger of the deductor once the statement is filed. This credit can be used for further GST payments and can also be refunded.

What is the new filing requirement for GSTR-7 under the updated GST rules?

Under the new regulations, it is mandatory for all GST TDS deductors to file GSTR-7 by the 10th of every month, regardless of whether a TDS liability exists for that month.

Is there a late fee waiver for GSTR-7 filings?

Yes, a late fee waiver has been provided for GSTR-7 filings from June 2021 onwards, under Notification No. 23/2024. However, for any returns due after that, the late fee has a cap, which is ₹2,50,000 for CGST and ₹1,00,000 for SGST.

What changes were made to the GSTR-9 filing process for FY 2023-24?

For GSTR-9 of the financial year 2023-24, the due date for filing is now December 31, 2024. Additionally, businesses are required to consider Form GSTR-2B for input tax credit claims, as opposed to the earlier practice of using Form GSTR-2A.

What is the significance of the waiver of late fees for GSTR-7 filers?

The waiver of late fees for GSTR-7 filers encourages timely filing and reduces the financial burden on businesses who may have missed filing deadlines for GST returns from June 2021 onward.

What does the government require from GST TDS deductors in terms of compliance?

The government has made it clear that GST TDS deductors must be compliant with the filing of GSTR-7 every month. Non-compliance may lead to penalties, and the requirement for separate GST registration for TDS deductors is now mandatory.

How are GST return filing deadlines managed under the new rules?

GST TDS filers are now required to file their returns by the 10th of every month. The late fee waiver applies to returns due since June 2021, but for those with pending returns, the late fee is capped, with a limit on how much can be charged.