The Office Memorandum dated August 16, 2023, from the Ministry of Finance, Department of Expenditure, Controller General of Accounts, addresses the topic of “Deduction and Deposit of TDS (Tax Deducted at Source) under GST by DDOs (Drawing and Disbursing Officers).” The memorandum outlines guidelines and procedures for government agencies (DDOs) to deduct and deposit TDS under the Goods and Services Tax (GST) regime.
Deduction and Deposit of TDS under GST by DDOs
Most Immediate/Time Bound
Ministry of Finance
Department of Expenditure
O/o Controller General of Accounts
Mahalekha Niyantrak Bhawan,
E Block, GPO Complex, INA,
Subject: Deduction and Deposit of TDS under GST by DDOs.
The Department of Revenue( DOR), Ministry of Finance vide F.No.S.31011/11/2018-ST-1-DoR dated 14-09-2018 had issued guidelines for deduction and deposit of TDS by Government Agencies (DDO) under GST. As per circular ibid, DDO should maintain a Register to keep record of all TDS deductions made during the month and DDO shall prepare the bill for the bunched TDS amount, for payment through the concerned payment authority. The payment authority will pass the bill by clearing the Suspense Head operated against that particular DDO after exercising necessary checks up to 10′” of next month.
Accounting entries for TDS-related transactions made prior to July, 2019.
- As per paragraph Q(iv) of the Department of Revenue circular dated 14-09-2018 read with DOR circular no 67/41/2018-DOR dated 28-09-2018, TDS by DDO under GST was to be initially credited to Suspense Accounts- ‘8658-101-08-GST TDS’ in respect of bunching of deductions w.e.f. 01-10-2018 and at the time of monthly clearance , minus credit was to be afforded to this head of accounts.
Accounting entries for TDS-related transactions after July, 2019
- The correction slip no. 932 dated 04-06-2019 to the List of Major Minor Heads of Account of Union and States for opening of new Minor Head ‘139-GST-TDS’ under ‘8658-Suspense Account was issued. Further, the O/o CGA vide OM No. S-11022/01/183/MF. CGA/DAMA/Discrepancies in A/cs/2018-19/340, dated 30-09-2019 (copy attached) had stated that new functional head ‘8658.00.139-GST-TDS’ should be used and suspense head ‘8658.00.101.08-GST TDS’ not be operated.
- On review of accounts, it is observed that: –
(i) Some PAOs are still operating(Credit and Debit) the defunct sub-head ‘8658.00.101.08- GST TDS’ for fresh classification and clearance thereof. As such some of the PAOs are having balances (Credit and Debit) under defunct head ‘8658.00.101.08-GST-TDS’ as on 11-08-2023(Annexure ‘A ‘for Credit and Annexure ‘B’ for Debit).
(ii) There are adverse balances appearing under the head ‘8658.00.139-GST TDS’ against some of the PAOs (Annexure ‘C’) .
(iii) Some PAOs are incorrectly operating debit side of the head ‘8658.00. 139-GST TDS’ for clearance of Credits (Annexure ‘D’).
- Now, it is reiterated that only following entries should be effected under the head ‘8658.00.139-GST-TDS’:-
(i) While deducting TDS :
Debit Functional Major Head
Credit 8658.00.139-GST TDS
(ii) While clearing the TDS (making payment to the GSTN):-
(-) Credit 8658.00.139-GST TDS (Debit should not be effected)
Credit 8670-Cheques and Bills
- The misclassification is not only affecting the quality of accounts but also resulting in increase of suspense balances/ adverse balances. Therefore, to regularize the deduction and deposit of GST-TDS following actions should be taken by relevant Ministries/Departments:-
(i) Balances lying under the head ‘8658.00.101.08’ should be transferred to the head ‘8658.00.139’ and defunct sub-head ‘8658.00.101.08 should not be used for further deposit of GST-TDS.
(ii) The prescribed TDS-Register should invariably be maintained and it must be ensured that balances under the head ‘8658.00.139’ matches with the amount outstanding in the TDS register.
(ii) Timely Deposit of TDS to GSTN should be ensured as instructed by the Department of Revenue to avoid unnecessary payment of interest on amount of delayed deposits.
(iv) It needs to be ensured that balances under the head ‘8658.00.139′ should only be depicted as Credit entry [Credit or minus Credit].
(v) Further, steps should be taken to clear any adverse balances under the head 8658.00.139 or under 8658.00.101.08.
- The appropriate accounting entries should invariably be carried out in the accounts by 15th September 2023 under intimation to this office.
This issue with the approval of the Additional Controller General of Accounts.
Joint Controller General of Accounts (ARPR)