This document provides a comprehensive guide on Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) under GST in India. TDS is applicable on certain transactions where payments exceed Rs. 2.5 lakh, while TCS relates to e-commerce operators collecting a percentage from suppliers on their platforms. Compliance requirements for both TDS and TCS include registration, deduction/collection, payment to the government, and issuing certificates to suppliers.

1. Understanding TDS and TCS
under GST: A Comprehensive
Guide in India
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Tax Deducted at Source (TDS):
TDS under GST is a mechanism through which a certain percentage
of the payment is withheld by the person making the payment
(deductor) at the time of making the payment to the supplier
(deductee). The withheld amount is then remitted to the

2. government. TDS is applicable on specific transactions as prescribed
by the government. The deductor is required to issue a TDS
certificate to the deductee.
Applicability of TDS:
TDS is applicable under GST in the following scenarios:
1. When the total value of supply under a contract exceeds a
specified threshold, which is currently set at Rs. 2.5 lakh.
2. When a government department or a PSU (Public Sector
Undertaking) is the recipient of goods/services worth more
than Rs. 2.5 lakh.
TDS Rates:
The TDS rate under GST is usually 2% (1% each for CGST and
SGST/UTGST). Therefore, a total of 2% of the payment amount is
deducted as TDS and remitted to the government.
TDS Compliance:
1. Registration: Deductors are required to obtain TDS
registration and obtain a TAN (Tax Deduction and Collection
Account Number).
2. Deduction: Deduct TDS at the prescribed rate from the
payment made to the supplier.

3. 3. Payment: Pay the deducted TDS to the government and file
GSTR-7, a monthly return containing the details of TDS
deducted and deposited.
4. TDS Certificate: Issue a TDS certificate to the supplier
(deductee) mentioning the TDS amount deducted.
Tax Collected at Source (TCS):
TCS under GST is a mechanism through which the e-commerce
operator collects a certain percentage of the transaction value from
the supplier of goods or services made through the operator’s
platform. TCS is collected by the e-commerce operator and
subsequently remitted to the government.
Applicability of TCS:
TCS is applicable under GST in the case of e-commerce operators
facilitating supplies by other suppliers through their platform. It is
not applicable to all e-commerce supplies, but only to specific
categories as defined by the government.
TCS Rates:
The TCS rate under GST varies and is generally a small percentage
of the transaction value. The exact rate depends on the nature of the
supplies and the applicable CGST and SGST/UTGST rates.
TCS Compliance:

4. 1. Registration: E-commerce operators need to obtain TCS
registration and obtain a TAN (Tax Deduction and Collection
Account Number).
2. Collection: Collect TCS at the prescribed rate from the
supplier at the time of payment settlement.
3. Payment: Pay the collected TCS to the government and file
GSTR-8, a monthly return containing the details of TCS
collected and deposited.
4. TCS Certificate: Issue a TCS certificate to the supplier
mentioning the TCS amount collected.
It’s important for businesses and individuals to understand and
comply with the TDS and TCS provisions under GST to ensure
smooth and lawful transactions. However, tax laws are subject to
change, so it’s recommended to refer to the latest official
government notifications or consult with a tax professional for the
most up-to-date information.
Read more: https://myefilings.com/understanding-tds-and-tcs-
under-gst-a-comprehensive-guide/