Understanding TDS Under GST
Who is Liable to Deduct TDS?
Government departments, government agencies, local authorities, certain corporations, and other notified entities have the responsibility to deduct TDS under GST law.
When to Deduct TDS?
TDS deductions become necessary when the total value of a supply under a single contract exceeds ₹2.5 lakhs.
TDS Rate
The standard TDS rate under GST is 2% of the payment amount (excluding GST components). This 2% is divided into 1% under CGST (Central GST) and 1% under SGST (State GST) or IGST (Integrated GST), depending on the transaction type.
How to Deduct TDS on GST Bill? (with example)
TDS, or Tax Deducted at Source, is a mechanism in the Indian tax system designed to collect taxes at the time of payment. Under the GST regime, certain entities must deduct TDS when making payments for specific goods or services. In this article, we’ll explain how to deduct TDS on a GST bill and provide a clear, illustrative example.