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📘 TDS UNDER GST – Diary Notes
1) Applicability
TDS under GST applicable when contract value exceeds ₹2,50,000
Value considered excluding GST
Applicable between deductor and supplier
2) Who Deducts TDS?
Government Departments
Local Authorities
Government Agencies
Notified Persons
3) Rate of TDS
Intra-State Supply
Total TDS = 2%
1% CGST
1% SGST
Inter-State Supply
TDS = 2% IGST
4) On What Amount?
TDS deducted only on:
✅ Taxable Value
Not on:
GST
Cess
5) Time of Deduction
TDS deducted at:
Time of payment OR
Time of credit
👉 Whichever is earlier
6) Compliance Timeline
Deposit TDS
Within 10 days from end of month of deduction
TDS Return
File GSTR-7
Monthly filing
TDS Certificate
Issue within 5 days of deposit
7) Impact on Supplier
TDS amount credited to supplier’s Electronic Cash Ledger
8) Interest & Late Fee
Interest
18% p.a. on late deposit
Late Fee
Applicable for delayed GSTR-7 filing
Subject to maximum limit as per law
9) Important Exception
No TDS when:
Supplier’s State/UT and
Place of Supply
are different from recipient’s registration State/UT.
10) Practical Examples
Example 1 – TDS Applicable
Recipient: Maharashtra
Supplier: Maharashtra
Place of Supply: Maharashtra
Contract Value
₹5,00,000 (excluding GST)
TDS @ 2%
₹10,000
Payment to Supplier
₹4,90,000
✅ Result: TDS Applicable
Example 2 – TDS Not Applicable
Recipient: Maharashtra
Supplier: Karnataka
Place of Supply: Karnataka
❌ Location mismatch → No TDS

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