Subject: - Enforcement of TDS Provision under GST w.e.f. 1st October, 2018.

It is brought to your notice that the State government has notified that Tax Deducted at Source (TDS) provisions under section 51 of HPGST Act, 2017 will be implemented in Himachal Pradesh w.e.f. 01-10-2018.

Therefore, the following entities are required to deduct TDS at the rate of 2 per cent (1% SGST+ 1% CGST) for intra-state supplies or 2 per cent IGST for Inter-state supplies from the payment made or credited to the supplier of taxable goods or services or both, where the total value of such supply, under a contract, exceeds Rs. 2.5 lakh:-

(a) a department or establishment of the Central Government or State Government; or

(b) local authority; or

(c) Governmental agencies; or

(d) an authority or a board or any other body,-

(i) set up by an Act of Parliament or a State Legislature; or

(ii) established by any Government, with fifty-one per cent, or more participation by way of equity or control, to carry out any function;

(e) Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860); and

(f) public sector undertakings.

The Deductor under TDS provisions would be liable to deposit the payment of TDS by the 10th day of the next month. The detailed guidelines for Deductions and Deposits of TDS by the DDO under GST have been issued by Government of India vide Circular No. 65/39/2018-DOR dated 14th September, 2018 (copy enclosed). Further, copies of Frequently Asked Questions (FAQ's) and Manual regarding registration as a Tax Deductor at Source are also enclosed herewith for your information please. The soft copies of the same are also available on the official website of Excise & Taxation Department, H.P., i.e., www.hptax.gov.in and at national GST Portal, i.e., www.gst.gov.in.

You are, therefore, requested to ensure to get registered as per provisions of the HPGST Act, 2017 (if not already) and further to ensure to deduct and deposit TDS at the prescribed tax rate under the HPGST Act, 2017.

Encls: As above

Yours faithfully,

(Rajeev Sharma, IAS)

Commissioner of State Taxes and Excise,

Himachal Pradesh.