TDS on GST

TDS under Income Tax is different from TDS under GST. There was a provision of TDS under VAT Act also. TDS under the GST Law is different from the above. Deductions of tax under the GST Laws is required to be made wherever applicable while making payments to the suppliers/ vendors of goods or services or both under GST for taxable supply of goods or services or both.

Who are liable to deduct TDS?

The following class of persons are required to deduct TDS on GST from the payment made or credited to the supplier if the Contract Value is more than Rs. 2.5 Lakhs:-

A Department or Establishment of the Central Govt or State Govt

Local Authority

Govt Agencies

Such persons or category of persons notified by the Govt.

The following category of persons have been notified by the Govt on which the provisions of TDS on GST would be applicable:-

An authority or board or any other body with 51% or more participation by way of equity or control

Set up by an Act of Parliament or a State Legislature; or

Established by any Govt.,

Society established by the Central Govt. or State Govt. or a Local Authority under the Society Regulations Act, 1860

Public Sector Undertakings

No TDS to be deducted if the payment is made by a person who is not mentioned in the above mentioned list.


TDS @ 2% is required to be deducted on payment made to the supplier of taxable goods or services of both where the value of such supply under a contract exceeds Rs. 2.5 Lakhs.

The provisions of TDS on GST are applicable from 1st Oct 2018 [Notification No. 50/2018 – Central Tax dated 13th Sept 2018].

For the purpose of the computation of the contract value, the following shall be excluded

Central GST

State GST

Union Territory GST

Integrated GST

Cess

1% TDS is required to be deducted under both the CGST and the SGST Act and therefore the total TDS to be deducted is 2%. In case of an inter-state transaction, IGST would be levied and 2% TDS would be levied in this case as well.

No TDS is to be deducted against the payment for Exempted goods or services provided.

Yes, agree with Pankaj sir view.
When there is exempted supplies then there is no tax liability, so No TDS to be deducted as told by Pankaj sir.

PSU to PSU no need to deduxt TDS