When TDS is not Applicable
1) Exemption of CGST has been granted for intra-state supplies received from
the unregistered supplier by the deductor.
Notification No.9/2017-Central Tax (Rate) But the said exemption is subject to
condition that deductor is being registered under the act only by virtue of section
24(vi).
2) No deduction shall be made if the location of supplier and place of supply
is in state which is different from state or union territory of registration of
recipient.
(a) Supplier, place of supply and recipient are in the same state. It would be
intra-State supply and TDS (Central plus State tax) shall be deducted. It would be
possible for the supplier (i.e. the deductee) to take credit of TDS in his electronic
cash ledger.(b) Supplier as well as the place of supply are in different states. In such cases,
Integrated tax would be levied. TDS to be deducted would be TDS (Integrated
tax) and it would be possible for the supplier (i.e. the deductee) to take credit of
TDS in his electronic cash ledger.(c) Supplier as well as the place of supply are in State A and the recipient is
located in State B. The supply would be intra-State supply and Central tax and
State tax would be levied. In such case, transfer of TDS (Central tax + State tax of
State B) to the cash ledger of the supplier (Central tax + State tax of State A)
would be difficult. So, in such cases, TDS would not be deducted.