TDS under GST

TDS under GST, or Tax Deducted at Source in the Goods and Services Tax system, involves deducting tax when making payments for goods or services. TDS provisions are governed by Section 51 of the CGST Act, 2017, applying to specified entities making contractual payments exceeding Rs. 2.5 Lakhs.

The TDS rate is 2% of the total payment (1% CGST and 1% SGST or 2% IGST). Deductors include government departments, local authorities, and agencies. Separate registration as "TAX DEDUCTOR" is necessary, and TDS must be deposited by the 10th of the following month using Form GSTR 7 on the GST portal.

TDS is not required for exempted goods or services. Deductees can claim TDS by filing the "TDS and TCS Credit Received" form, with no specific due date but advisable before tax payment deadlines. This transparent process ensures compliance with GST regulations. TDS under GST streamlines transactions and compliance, serving as a mechanism for deducting tax at the source.