SSI units that have been supplying goods to government organisations say that the “GST/TDS rule is suicidal in the GST era, harassment for all genuine taxpayers”. Such suppliers have now appealed to Finance Minister Nirmala Sitharaman to reconsider the GST/TDS deduction rule or waive the deduction mandate at least for the supply of goods effected by SSI units.
A member of Railway Suppliers’ Association told BusinessLine that two percent TDS (Tax Deducted at Source) is being deducted by the government organisation (including Corporation and Municipality) from the payment, if the purchase order was for an amount greater than or equal to ₹2.5 lakh. And this deducted amount is remitted to the GST portal (by the deductor); the supplier would have to adjust the TDS against GST payable in subsequent bills.
“This is posing huge hardship as it involves a lot of clerical work apart from blocking our working capital requirements. While in the early days of GST roll out, the GST/TDS rule was supposedly notified to nab tax evaders, it seems redundant, considering that the GST invoice is raised for the supply of goods followed by eWay bill before despatch of every supply. And every transaction is fed online. It (GST/TDS) may be sensible for services, as the eWay bill would not be required,” the source said.
Asserting that the GST/TDS is harassment for all genuine tax payers, the source pointed out that to fulfil the GST/TDS Rule, the government officials would have to deduct tax, deposit the TDS, file separate GSTR-7 return, issue a certificate to the deductee and maintain record. “This chain is increasing the clerical work for both – the government organisation and suppliers”, reiterating the need for waiver of the deduction mandate at least for SSI units.