GST TDS & TCS: Rules, Rates & Filing Guide

GST TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) are mechanisms under the GST framework to ensure tax compliance. TDS applies to government departments and specified entities making payments to suppliers, while TCS applies to e-commerce operators. This guide covers the rules, rates, and filing procedures for both.

Disclaimer: CitizenNest is an independent informational platform and is not affiliated with or endorsed by the Government of India. Verify details on the official GST portal.

GST TDS — Tax Deducted at Source (Section 51)

Who Must Deduct GST TDS?

The following entities must deduct TDS when the total contract value exceeds ₹2.5 lakh:

• Central or State Government departments
• Local authorities (municipal corporations, panchayats)
• Government agencies and PSUs
• Authorities or boards established by Parliament/State Legislature
• Societies established by Central/State Government under Societies Registration Act
• Public Sector Undertakings (PSUs)

GST TDS Rate

TDS is deducted on the taxable value (excluding GST amount). For example, if the invoice value is ₹1,18,000 (₹1,00,000 + ₹18,000 GST), TDS is deducted on ₹1,00,000 only.

When to Deduct GST TDS

• Value of supply under a single contract exceeds ₹2.5 lakh (excluding tax)
• Applies to supply of goods, services, or both
• TDS must be deducted at the time of payment or credit to the supplier, whichever is earlier

TDS Registration

• TDS deductors must obtain a separate GST registration as TDS deductor
• Apply using Form GST REG-07 on the GST portal
• No threshold turnover requirement for registration

TDS Payment and Return Filing (GSTR-7)

How to File GSTR-7

1. Log in to GST Portal
2. Go to Services → Returns → Returns Dashboard
3. Select the return period and click GSTR-7
4. Fill Table 3 — TDS details (GSTIN of deductee, invoice details, amount)
5. Fill Table 4 — Amendments to previously filed details
6. Pay the TDS amount through the electronic cash ledger
7. File using DSC or EVC

TDS Certificate

• The deductor must issue a TDS certificate in Form GSTR-7A to the deductee
• Certificate is generated automatically on the portal after GSTR-7 is filed
• Deductee can view TDS deducted in their electronic cash ledger

GST TCS — Tax Collected at Source (Section 52)

Who Must Collect GST TCS?

Every e-commerce operator who:

• Owns, operates, or manages a digital or electronic platform
• Facilitates supply of goods or services through the platform
• Collects consideration on behalf of suppliers

Examples: Amazon, Flipkart, Swiggy, Zomato, Urban Company, etc.

GST TCS Rate

TCS is collected on the net value of taxable supplies made through the platform (after deducting returns/refunds).

TCS Payment and Return Filing (GSTR-8)

How to File GSTR-8

1. Log in to GST Portal
2. Go to Services → Returns → Returns Dashboard
3. Select the return period and click GSTR-8
4. Fill details of supplies made through the platform (GSTIN of supplier, value)
5. Fill TCS collected and TCS payable
6. Pay TCS through the electronic cash ledger
7. File using DSC or EVC

E-Commerce TCS Provisions — Key Points

1. Mandatory registration — E-commerce operators must register under GST regardless of turnover
2. Suppliers on platforms — Must register under GST if selling through e-commerce (no threshold exemption for inter-state supplies)
3. Net value calculation — TCS = 1% of (total sales - returns) for the month
4. TCS credit — Suppliers can claim TCS credit in their electronic cash ledger after the e-commerce operator files GSTR-8
5. Mismatch resolution — If TCS details don't match supplier records, the supplier should raise the issue with the operator

How the Supplier Claims TDS/TCS Credit

TDS Credit

1. Deductee (supplier) files GSTR-3B
2. TDS deducted is auto-reflected in the supplier's electronic cash ledger
3. Supplier can use this credit for payment of GST liability

TCS Credit

1. TCS collected is reflected in the supplier's account after GSTR-8 is filed
2. Credit appears in the electronic cash ledger
3. Can be used for payment of any GST liability

Refund of Excess TDS/TCS

If TDS/TCS credit exceeds GST liability:

1. File a refund application in Form GST RFD-01 on the GST portal
2. Select refund type — "Excess balance in electronic cash ledger"
3. Refund is processed within 60 days (subject to verification)

Comparison: GST TDS vs TCS

Important Tips

1. Deductors: File GSTR-7 on time — Late filing attracts interest at 18% per annum plus late fee
2. Suppliers: Verify TDS/TCS credits — Check your electronic cash ledger regularly for credited amounts
3. E-commerce sellers: Reconcile TCS — Match TCS shown in GSTR-8 with your sales records monthly
4. Separate registration — TDS deductors need registration under a specific TDS category (not regular GST)
5. Keep contract records — The ₹2.5 lakh threshold for TDS is per contract, not per invoice

Related Guides

• GST Registration Online Guide
• GSTR-9 Annual Return Filing Guide
• 26AS Form Not Updated Fix Guide

FAQs

1. Is GST TDS the same as Income Tax TDS?

No. GST TDS is deducted under Section 51 of the CGST Act on taxable supplies, while Income Tax TDS is deducted under the Income Tax Act on income. They are separate compliances.

2. What happens if TDS is not deducted?

The deductor will be liable to pay the TDS amount along with interest at 18% per annum from the date it was due. The deductor may also face penalties.

3. Can a supplier claim refund if excess TDS is deducted?

Yes. If TDS credit exceeds GST liability, the supplier can file a refund claim under "excess balance in electronic cash ledger" using Form GST RFD-01.

4. Do e-commerce operators deduct TDS or collect TCS?

E-commerce operators collect TCS (Tax Collected at Source) under Section 52, not TDS. TDS applies to government entities and PSUs.

5. Is there a threshold for GST TCS by e-commerce operators?

No. E-commerce operators must collect TCS on all taxable supplies facilitated through their platform, regardless of value.

6. How does TCS credit appear for the supplier?

After the e-commerce operator files GSTR-8, the TCS amount is credited to the supplier's electronic cash ledger. The supplier can use it for GST payments or claim a refund.

7. Can a composition dealer sell through e-commerce platforms?

No. Composition dealers cannot supply goods through e-commerce operators who are required to collect TCS under Section 52.