Who is required to deduct TDS on GST w.e.f. 1.10.18

The next class of Men are required to deduct TDS on GST in the payment made or credited to the supplier when the Contract Value is more than Rs. 2.5 Lakhs:-

  1. A Department or Establishment of the Central Govt or State Govt
  2. Local Authority
  3. Govt Agencies
  4. Such persons or category of persons notified by the Govt.

The next category of persons have been Advised by the Govt 13.09.2018 Where the Terms of TDS on GST would be applicable:-


  1. An authority or board or any other body with 51% or more participation by way of equity or control
    • Set up by an Act of Parliament or a State Legislature; or
    • Established by any Govt.,
  2. Society established by the Central Govt. or State Govt. or a Local Authority under the Society Regulations Act, 1860
  3. Public Sector Undertakings

Introduction of TDS under GST the main objective

Initially this Notion introduced in the Income Tax Act.The purpose of launch of TDS on GST is simply to enable the govt to have a trail of transactions and to monitor and verify the compliance.

It acts as a highly effective instrument to prevent tax evasion and expands the tax net, as it provides for the creation of an audit course. As same from the Revenue Tax resigm, the individual deducting the TDS must deposit the TDS with the Govt and dilemma Form 16 and Form 16A, similarly under GST Act too, the person deducting the TDS will be asked to deposit and issue Form GSTR 7A into the individual whose TDS has been deducted.

Cases where TDS on GST is not required to be deducted

TDS on GST is just necessary to be deducted where the payment made or credited to the supplier is done by the above mentioned category of persons.

There are certain exceptions to this and at the next Instances, TDS Wouldn’t be deducted if the payment Has Been made by the Aforementioned persons:-

A. Contract Value does not exceed Rs. 2.5 Lakhs

If the Contract Value does not surpass Rs. 2.5 Lakhs, No TDS is required to be deducted.

Therefore, while determining the applicability of TDS on GST — it is the individual contract value that will be considered irrespective of their total no. of contracts.

B. Location of Recipient is different from Location of Supplier and Place of Supply

Quickly Check Applicability of TDS under GST

Proviso to section 51 of CGST Act’ 17

Case Location of Supplier Place of Supply LocationofRecipient TDS GST Charge
1 Delhi Delhi Delhi Applicable Delhi CGST, Delhi SGST
2 Delhi Rajasthan Rajasthan Applicable IGST
3 Delhi Delhi Haryana Not Applicable Delhi CGST, Delhi SGST

TDS on GST would not be applicable if the Location of Recipient is different from the Location of Supplier and the Place of Supply.


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