Detailed guide on TDS in GST

Detailed guide on TDS in GST:

What is TDS in GST? 

TDS is advance deposit if tax made by the person responsible to make payment of that supply. In simple words an amount is deducted and deposited to the tax account of recipient by the person making payment.

Who all are covered in TDS under GST: 

Section 51 of CGST Act read with Notification No. 50/2018 – Central Tax provide for list of taxpayers liable to deduct tax at source.

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

(b) local authority; or

(c) Governmental agencies; or

(d) such persons or category of persons as may be notified by the Government on the recommendations of the Council

Following are notified by government via notification no. 51/2018 CT dated 13th October 2008.

Notification No. 50/2018 – Central Tax dated 13th September 2018.

(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) The 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

When TDS in GST  is required to be deducted? 

TDS is required to be deducted in cases where the contract value is more than Rs. 2,50,000. But it will be deducted at the time of making payment @2% of the amount of payment. e.g M/s A has entered into a contract with B contractor for construction of a road for Rs. 350000. A ltd made the payment of Rs. 50000 to B. Now TDS will be deducted on Rs. 50,000 (less tax is included in payment).