Central Government vide notification No.50-Central Tax-Dated 13-09-2018 & notification No.51-Central Tax-Dated 13-09-2018 has appointed 1st day of October 2018 as the date on which the provision of Sec 51 (TDS) & Sec 52 (TCS) shall come into force.

1. Who is required to Deduct TDS under GST

Section 51 of the CGST Act, 2017 has prescribes the authority and procedure for ‘Tax Deduction at Source’

As per section 51(1) , the following class of person shall be required to deduct tax at source @2% ( CGST  1% + SGST 1%)  on the payment made or credited to the supplier where the total value of supply under a contract exceed Rs.2,50,000/-excluding GST:

(a) a department or establishment of the Central Government or State Government; or

(b) local authority; or

(c) Governmental agencies; or

(d) Following categories of person has been notified vide Notification No.33/2017-Central Tax Dated 15th Sept 2017 under clause 51(1)(d)

a. an authority or a board or any other body, –

(i) set up by an Act of Parliament or a State Legislature; or

(ii) established by any Government,

with fifty-one percent or more participation by way of equity or control, to carry out any function;

b. society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860);

c. public sector undertakings

2. Deposit of TDS Under GST with the Government:

The amount deducted shall be paid to the Central Government within ten days after the end of the month in which such deduction is made. 

3. TDS Certificate under GST

A TDS certificate is required to be issued by deductor (the person who is deducting tax) in Form GSTR-7A to the deductee (the supplier from whose payment TDS is deducted), within 5 days of crediting the amount to the Government, failing which the deductor would be liable to pay a late fee of Rs. 100/- per day from the expiry of the 5th day till the certificate is issued.

4. When GST not to be deducted at Sources (TDS)

No deduction shall be made if the location of the supplier and the place of supply is in a State or Union territory, which is different from the State, or as the case may be, Union Territory of registration of the recipient. 


Registered dealer of Bhubaneswar has placed supply order to a registered dealer of Bihar for delivery of material to a party in Patna. The supply would be intra-State supply and Central tax and State tax would be levied. In such case, transfer of TDS (Central tax + State tax of Orissa) to the cash ledger of the supplier (Central tax + State tax of Bihar) would be difficult. So in such cases, TDS would not be deducted. 

Thus, when both the supplier as well as the place of supply are different from that of the recipient, no tax deduction at source would be made.

5. Power to collect tax at sources (TCS)

Section 52 of the CGST Act, 2017 provides for Tax Collection at Source, by e-Commerce Operator in respect of the taxable supplies made through it by other suppliers, where the consideration in respect of such supplies is collected by him. 

6. Deposit of TCS with the Government:

The amount of tax collected by the Operator is required to be deposited by the 10th  of the following month, during which such collection is made. 

The Government has placed the responsibility on the Operator to collect the ‘tax’ at a rate of 2% (1% CGST+ 1% SGST) from the supplier. This shall be done by the Operator while paying the supplier, the price of the product/services, less the tax, calculated at the rate of 2%. The said amount will be calculated on the net value of the goods/services supplied through the portal of the Operator.  

7. Credit of tax collected:  

The tax collected by the Operator shall be credited to the cash ledger of the supplier who

has supplied the goods/services through the Operator. The supplier can claim credit of the tax collected and reflected in the return by the Operator in his [supplier’s] electronic cash ledger.

S K Mishra, FCA ,LL.B  is a Fellow member of The Institute of Chartered Accountants of India, New Delhi & Fellow member of The Institute of Cost Accountant of India, Kolkata. Visit www.skmadvisory.com. He can be reached at gstresolve@gmail.com

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Shri S K Mishra, FCA, LL.B is a Fellow Member of The institute of Chartered Accountants of India, New Delhi & Fellow Members of the Institute of Cost Accountants of India, Kolkata. He specializes in the field of GST and Author of Amazon best Seller " Systematic Approach to GST " & "Indirect View Full Profile

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Tags : CGST (388) goods and services tax (6871) GST (6472) GST Notifications (1046) tcs (217) TDS (1152)

5 responses to “TDS / TCS Provision under GST effective from 1st October 2018”

  1. Sujit Kumar says:

    Is TDS & TCS Credit received return applicable for all or every month.

  2. Rohit Shinde says:

    In the Bihar Orissa example, the supply involves movement of goods, on the direction of a third party, whether as an agent or otherwise, in which case the place of supply shall be the principle place of business of such third party, irrespective of the place of delivery of goods. Hence supply will be an inter state supply and not an intrastate supply. Also as the place of supply (orissa) is same as location of the recipient-third party (orissa), TDS shall be levied.

  3. Rohit Shinde says:

    The Orissa-Bihar example is clear case of supply involving movement of goods, on the direction of a third party, whether as an agent or otherwise, in which case the place of supply shall be the principle place of business of such third party, irrespective of the place of delivery of goods. So it will definitely be an Inter State Supply and not Intra State. Also, as the Place of Supply (Orissa) is same as Location of the Recipient – third party – (Orissa) , TDS shall be levied.

  4. PAWAN SINGHAL says:

    in the example u took up in the tds, the supply would be constituted as inter state supply & not a intra state supply. since both the dealers are in different state & registered, thus dealer in state of bihar is required to bill to party in bhuvneshwara & IGST would be charged & further dealer of bhuwneshwara would bill party of patna on his own account. it is the case of bill to ship to model as per provisions of IGST Act.

  5. Vinod Daga says:

    In the above example pls clarify following :-

    Party A of Bihar will bill to Party B in Bhubneshwar levying IGST

    Party B of Bhubneshwar will bill to Party C in Patna levying IGST

    so Ultimately GST will reach to Bihar State

    So whether any party need not to deduct TDS or only Party C is exempted

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