TAX DEDUCTED AT SOURCE (TDS) UNDER GST - Handbook of GST Law & Procedures (CBIC) [October 2024] - GST

15. TAX DEDUCTED AT SOURCE (TDS) UNDER GST 15.1 Government and Government undertakings and other notified entities making contractual payments, where total value of such supply under a contract exceeds Rs. 2.5 Lakhs, to the suppliers of goods and/or services (commonly called as Vendors), are required to deduct TDS (Tax Deducted at Source) @ 2% (1% CGST + 1% SGST) of the total payment made, as per Section 51 of the CGST Act, 2017. 15.2 The TDS amount shall be remitted by the Deductor of tax into the appropriate GST account. Such TDS amount will be reflected in the electronic cash ledger of the concerned supplier, which he can utilize towards discharging his liability towards tax, interest fees and any other amount. 15.3 The TDS Deductor will have to get compulsorily registered with GST, deposit the TDS amount in the Government account by debiting the electronic cash ledger and report the same in the GSTR-7 Returns. They are also required to issue certificate of such TDS to the deductee (supplier) within 5 days of crediting the TDS to the Government account.