GST Impact on TDS

Tally Solutions |Updated on: May 13, 2022

• Introduction to TDS in GST
• When and who is liable to deduct TDS under GST
• TDS rate in GST
• TDS under GST with example

Introduction to TDS in GST

Tax deducted at source introduced in GST is a mechanism to track the transaction of supply of goods and/or services by making the recipient of such supply to deduct a small percentage of amount to be paid to the supplier of such goods and/or services and deposit the same with the government.

The supplier in such cases takes into account the amount so deducted and makes the balance payment of tax to the government.

When and Who is Liable to Deduct TDS Under GST

• When to deduct?
  
  
  • The base on which TDS is deductible if the aggregate value of the contract exceeds a sum of Rs. 2.5 lacs
    
    
  • For the purpose of determining the value of Rs. 2.5 lacs, taxable value has to be taken.

Note: Taxable value is the value prior to tax computation or the value on which tax is proposed to be calculated.

• Who is liable to deduct TDS under GST?

The deductors of tax at source can be one or more of the following:

• • Department of Central or State Government.
    
    
  • An establishment of the central or state Government.
    
    
  • Governmental agencies.
    
    
  • Local authority.
    
    
  • Such category of persons as may be notified by Central or State Governments on the recommendation of GST Council.

TDS Rate in GST

The provisions laid in the act reads a rate of 2%, which would be required to be deducted and deposited from the payments made or credited to the supplier of taxable goods and services as may be notified by the Central or State Governments on the recommendation of GST Council.

TDS Under GST With Example

A better understanding of TDS provisions under GST could be claimed from the example given below :

Read More on GST

GST Software, GST Software for CAs, GST Software for Traders, GST Invoicing Software, GST Calculator, GST on Freight, GST on Ecommerce, GST Impact on TCS, GST Exempted Goods & Services, Reverse Charge Mechanism in GST, GST Declaration

GST Rates & Charges

GST Rates, GST Rate Finder, GST Rate on Labour Charges, HSN Codes, SAC Codes, GST State Codes

Types of GST

CGST, SGST, IGST, UTGST, Difference between CGST, SGST & IGST

GST Returns

GST Returns, Types of GST Returns, New GST Returns & Forms, Sahaj GST Returns, Sugam GST Returns, GSTR 1, GSTR 2, GSTR 3B, GSTR 4, GSTR 5, GSTR 5A, GSTR 6, GSTR 7, GSTR 8, GSTR 9, GSTR 10, GSTR 11