Home > GST > Help Center > TDS & TCS Under GSTLast Updated: Oct 29th 2024
TDS & TCS Under GST
Under the GST regime, Section 51 and 52 of the CGST act, 2017 prescribes the authority and procedure for ‘Tax deduction at source’ and ‘ Tax Collection at Source’.
This document covers
- Registration
- Persons required
- Persons on whose payment TDS /TCS (Deductees)
- Deposit of TDS /TCS
- TDS Certificate
- TDS /TCS Return
- FAQ's
1. Registration
TDS: A TDS deductor has to compulsorily register without any threshold limit. The deductor has a privilege of obtaining registration under GST without PAN. He can obtain registration using his TAN (Tax deduction and collection account number).Refer TAN Registration to register TAN for your entity.
TCS: The E-Commerce operator, as well as supplier supplying goods or services through an operator needs to compulsorily register under GST. The threshold limit is not applicable to them
2. Persons required to deduct TDS (Deductors) and collect TCS (Collectors)
TDS: The TDS provisions empower the central government to make it mandatory for the following persons to deduct tax at source from payments made to supplier of taxable goods or services.
- Central/State government department or establishment
- Local Authority
- Governmental Agencies
- Notified persons /category of persons
TCS: Every Electronic Commerce Operator (ECO), not being an agent has been mandated to collect TCS on the net value of taxable supplies made through it by other suppliers, whenever the ECO collects the consideration on behalf of the supplier
3. Persons on whose payment TDS /TCS is deducted / collected (Deductees)
TDS: The Deductees are the suppliers whose total value of supply of taxable goods and/or services under a contract exceeds Rs 250000 exclusive of tax & cess as per invoice
TCS: The Deductees are the suppliers who are the supplying the goods or services through Electronic Commerce Operator
4. Deposit of TDS /TCS with the government
The amount of TDS /TCS deducted at source should be deposited to the government account by deductor by 10th of succeeding month.
Refer Tax Compliance Calendar to know the latest due dates
5. TDS Certificate
A TDS certificate is required to be issued by deductor in prescribed form within 5 days of remittance to the Government to the deductee (the supplier on whose payment TDS is deducted)
6. TDS /TCS Return
TDS: The deductor is required to furnish the return in GSTR 7 within 10 days from the end of the month. If the supplier is unregistered, the name of the supplier rather than GSTIN should be mentioned.
TCS: The Electronic commerce operator is required to furnish the return in GSTR 8 with in 10days from the end of the month.
7. TDS & TCS Under GST FAQ's
It is not mandatory to file nil return in such case.
Filing of GSTR 8 is not mandatory for every tax period. Every ECO (electronic Commerce Operator) is required to file GSTR 8 for the tax period in which it has collected TCS
If the deductor does not furnish the certificate of deduction cum remittance within 5 days of remittance, the deductor is liable to pay the prescribed late fee.
If the deductor has not remitted the TDS amount to the government within a prescribed limit, he is liable to pay penal interest u/s 50 at the rate of 18% p.a
The deductor or deductee can claim a refund of excess deduction or erroneous deduction. The provisions of sec 54 relating to refunds will apply. However, if the deducted amount is already credited to Electronic Cash ledger of the supplier, the same shall not be refunded.
Yes, Supplier can claim the credit of TCS amount in his electronic cash ledger. This amount should be reflected in the monthly statement filed by ECO.
The rate of TDS prescribed is 2%, and rate of TCS prescribed is 1% by the government