Tax Deducted at Source (TDS) under Goods and Service Tax

Under the GST regime we have the basic 3 components of taxes. – CGST, SGST and IGST. As per the GST law, certain notified registered persons will be required to deduct these taxes while making payments to the registered supplier. In other words, TDS under GST shall be deducted and deposited with the government.

What is TDS under GST?

Tax Deducted at Source (TDS) is one of the ways to collect tax based on certain percentages on the amount payable by the receiver on goods/services. The collected tax is a revenue for the government.The provision pertaining to TDS under GST is given under Section 51 of the CGST Act to be read with CGST Rule 66.

A person who is liable to deduct TDS has to compulsorily register and there is no threshold limit for this. The registration under GST can be obtained without PAN and by using the existing Tax Deduction and Collection Account Number (TAN) issued under the Income Tax Act. Thus it can be said having TAN is mandatory.

When and to whom should the TDS be paid?

TDS shall be paid within 10 days from the end of the month in which tax is deducted. The payment shall be made to the appropriate government which means:

• The Central Government in case of the IGST and the CGST
• The State government in case of the SGST

Who is liable to deduct TDS under GST law?

• A department or an establishment of the Central Government or State Government; or
• Local authority; or
• Governmental agencies; or
• Such persons or category of persons as may be notified by the Government.

As per the latest Notification dated 13th September 2018, the following entities also need to deduct TDS-

• An authority or a board or any other body which has been set up by Parliament or a State Legislature or by a government, with 51% equity ( control) owned by the government.
• A society established by the Central or any State Government or a Local Authority and the society is registered under the Societies Registration Act, 1860.
• Public sector undertakings.

  How can I register as TDS or TCS?

  the Registration Application for Tax Deductor/Tax Collector can be filed by the applicant directly by themselves. In GST regime, the registration process is online and any person/entity wishing to register will have to access the GST system for the same.

  Any person who wish to get registered as the Tax Deductor/Tax Collector needs to apply in the form prescribed.

  2 %

  Liability to deduct TDS and TDS rate
  TDS is to be deducted at the rate of 2 % on payments made to the supplier of taxable goods and/or services, where the total value of such supply, under an individual contract, exceeds Rs. 2,50,000

  FAQs on Registration as Tax Deductor at Source

  • Applicant has valid PAN or TAN.
  • Applicant must have a valid mobile number.
  • Applicant must have valid E-mail ID.
  • Applicant must have the prescribed documents and information on all mandatory fields as required for registration.
  • Applicant must have a place of business