14 Sep 2018Posted By: Mudit Handa

TDS/TCS Provisions under GST to come into effect again

The Central Government has hitherto upgraded various laws and provisions under the Goods & Service Tax regime as regards GST registration and GST return filing procedure as to make them much more favourable to all the sectors of the economy. There is no doubt that the provisions under GST have been repeatedly altered in order to cater to the interests of all the taxpayers.


In a bid to further enhance the GST structure, the GST authority has decided to reintroduce the provision of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) vide its recent notification.


#1. When did the Government enforce the TDS & TCS provisions under GST?

The Central Government through its recent notification No.51 under Central Taxes had declared on 13th of September 2018 that the provisions of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) u/s 51 & Sec 52 respectively, shall come into force with effect from 1st of October 2018.


#2. Where are the provisions of TDS & TCS applicable under GST?

As per the CGST Act 2017-

  • The provision of TDS is applicable for the specified entities with GST registration that deal in goods & services worth ₹2.5 lakh or above.
  • The provision of TCS is for the e-commerce operators. The tax is to be collected at source by e-commerce operators prior to the payment to sellers active on their portals. The rate of TCS for both the entities is 1%.

#3. Who is required to Deduct TDS under GST?

As per the GST laws, the following entities can deduct TDS:

  • Department  of the Central or State Government
  • Any local authority
  • The Governmental agencies

Besides, following an authority or a board is also authorized to deduct TDS, which is:

  • Instituted through an Act of Parliament or State Legislature or
  • Incorporated by Central or State Government with a capital contribution of 51% or more by way of equity or control.
  • A society formed by the Central or State Government or a Local Authority
  • A PSU


#4. Why had the Government repealed the TDS & TCS provisions under GST?

When the new indirect tax regime was rolled out in July 2017, the TDS & TCS provisions were introduced as crucial anti-evasion tools. The GST Council in its 26th meeting had deferred the provisions of TCS & TDS owing to the increased burden of compliance, till September-end this year.

If you need any other guidance as regards GST registration in India or GST return filing process, feel free to contact us at 8881-069-069.


Posted By Mukesh Sharma
Posted Date 2018-09-16 07:44:21


Posted By Mudit Handa
Posted Date 2018-09-17 12:55:46

Mr. Mukesh Sharma, how can we help you?

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