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

1. What is TDS ?

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.

2. Who could be liable to deduct TDS under GST law ?

• Local Authorities; or

• Government Agencies; or

• Public Sector Undertakings; or

• Society established by the state or central government or a local authority and the society is registered under the Societies Registration Act, 1860; or

• An Authority or a board or any other body which has been set up by Parliament or state legislature or by a government, with 51% equity owned by the Government or

• Other person as may be notified by Government.

3. When will the liability to deduct TDS be attracted ?

TDS is to be deducted at the rate of 2 percent on payments made to the supplier of taxable goods and/or services, where the total value of such supply, under an individual contract, exceeds two lakh fifty thousand rupees. No deduction of Tax is required when the location of supplier and place of supply is different from the State of the registration of the recipient.

4. Registration Requirement

• Compulsory registration without any threshold limit

• Registration can be opted by PAN or TAN.

5. Date of deposit of TDS

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

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