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TDS and TCS under GST

TDS under GST law

TDS is to be deducted if the total value of individual contract exceeds 2.5 lakhs at the rate of 2 percent on payments made to the supplier of taxable goods and/or services. No need of deduction of Tax is required when the location of supplier and place of supply is different from the State of the registration of the recipient.

Due date for TDS payment

TDS deducted should be deposited within 10 days from the end of the month in which tax is deducted.

Liable for TDS Payment

  1. A department or an establishment of the Central Government or State Government
  2. Local Authority
  3. Government Agencies
  4. Persons or category of persons notified by Government.

Applicate rate of TDS

2% TDS needs to be deducted on payments made to the supplier of taxable goods and/or services.

Form required to file the TDS return

TDS return in form GSTR-7 should be filed within 10 days from the end of the month.

Refund of TDS possible under GST

Deductee can claim refund as per the provisions of the GST Act.

TCS under GST

TCS is to be collected by e-commerce operator on behalf of the supplier of goods, or services who makes supplies through operator’s online platform. TCS will be charged at percentage on the net taxable supplies.

Liable person to collect TCS under GST

E-Commerce platforms are liable to collect TCS. E-Commerce operators have to pay the consideration collected to the vendors after deducting the TCS amount and pay the net amount.

Exceptions for TCS under GST

Below are the exceptions to the TCS provisions for the services provided by an e-commerce platform.

  1. Unregistered Suppliers (Hotels, housekeeping services and clubs)
  2. Transportation of passengers.

Applicable rate under TCS

E-commerce operators should receive payment after deduction of TCS @ 1%.

Due date for depositing TCS

TCS collected should be deposited within 10 days from the end of the month in which tax is collected.

Form required to file the TDS return

TCS return in form GSTR-8 should be filed within 10 days from the end of the month.