Brief note on Tax Deducted at Source (TDS) under GST rule

1. Following entities are liable to deduct TDS on payments made to the supplier of taxable goods or services:

  • Government Departments/Agencies
  • Local authority; such as Municipality etc.
  • An authority 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 Government
  • Public sector undertakings ( PSU)

2. The TDS is deducted  if the individual contract value ( Purchase Order ) is more than 2.5 lakh.

2. Rate of TDS is 2% of invoice value excluding CGST, SGST & IGST.

3. Procedure of deduction TDS and claiming the same by supplier :-

  • Customer shall deduct the TDS and deposit it with the Government by 10th day of the following month
  • Customer shall file TDS return in Form -7 by 10th day of the following month
  • Customer shall provide a certificate in form GSTR – 7A by 15th day of the following month
  • Supplier of Goods and Service shall claim the tax at the time of filing the return.

  4. The above rule is effective from 1st October, 2018.

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Qualification: CS
Location: New Delhi, New Delhi, IN
Member Since: 25 Jan 2019 | Total Posts: 2

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  1. Devendra Sharda CA says:

    But this TDS amount neither shows in electronic cash ledger nor in electric credit ledger. Then How A Tax payer can take benefit of this TDS amount by lowering his cash payment towards his GST Tax Payment. Explain…

    1. rnjha says:

      You are right. Currently the tax amount is not appearing in cash/credit ledger. Even the certificate in Form 7A is not appearing. This may be due to technical issue. Hope GSTN will resolve this shortly.

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January 2021