The Provisions of TDS under GST made effective from 01 October 2018. As per the Notification, the person as specified in under clause (a), (b), (c) and (d) of section 51(1) of CGST Act are required to deduct the TDS from the supplier's bills.

Major Points to Consider after applicability of TDS Provision in GST are summarized below:

  1. Separate registration is required to be taken even if you are registered as Tax Payer. Now, you have to take registration as Tax Deductor.
  2. TDS is to be deducted where total value of Supply, under an individual Contract, exceeds Rs. 2,50,000.
  3. File the GSTR-7 (TDS Return) and make payments of TDS amount deducted on or before 10th of the succeeding month in which TDS deducted.
  4. Issue TDS Certificate in GSTR-7A within 5 days of depositing the tax to the government. Failure to do so make person liable to pay late fee of Rs. 100 per day upto maximum of Rs. 5000.
  5. No deduction of Tax is required when the Location of supplier and place of supply is different from the State of the registration of the recipient.  This provision can be better understood with following example:


Location of Supplier

Place of Supply

Location of Recipients

Provision of TDS





This is a case of Intra State Supply. TDS shall be deducted (1% each CGST & SGST).





This is a case of Inter State Supply. TDS shall be deducted (2% IGST)





This is a case of Inter State Supply. TDS shall be deducted (2% IGST)





This is a case of Intra State Supply. TDS is not required to be deducted as tax to be charged is CGST and SGST(Meghalaya). If deducted than credit of TDS could not be transferred to Recipient of other State (Assam).

1. Hence, in the nutshell we can say that is CGST/SGST charged in the invoice and the Location of Recipient is different than TDS is not required to be deducted.

2. Following are some illustrations where there is no requirement to deduct TDS in GST:

  1. "Bill to Ship To" Supply: In this case, Supplier (Delhi) delivers material to recipient in Rajasthan on the instruction of third person (Delhi). The supplier will raise invoice on third person registered in Delhi and Place of supply shall be assumed as Delhi (Bill to address).  But, the location of recipient is Rajasthan.   
  2. Services on Immovable Property (Hotel Accommodation): Place of Supply in case of Hotel service is the place where Hotel is situated. Hence, if ABC Ltd. (registered in Assam) takes service of Hotel in Delhi, then in this case Location of Supplier and Place of Supply is Delhi but location of recipient is Assam. There is no need to deduct TDS.
  3. Assembly or Installation of Goods: In case of Installation or assembly the place of supply is the place where installation took place. For example, service provider (registered in Gujarat) installs a machinery in Gujarat on the instruction of XYZ Ltd. ( registered in Delhi). In this case Location of Supplier and Place of Supply is different from the location of the recipient.

Special Note: As per the provision of TDS in GST, the deductor has to issue TDS certificate in GSTR-7A within 5 days of crediting the amount so deducted to the Government (Sec. 51(4)). In this regard, we all have to be very cautious as day for issue of TDS-Certificate would count from the day of deposit but GSTR-7A could be generated only after filling GSTR-7.  Suppose, we have deposited TDS deducted during the month of October 2018 on 02 November 2018. Now, as we know that GSTR-7 can be filed on or before 10 November, we file it on 08 November.  

In this regard, as due date for issue of TDS certificate is 05 day from the day of deposit i.e., 07 November but as per above situation we could not issue the certificate on or before 07 November as it can be issued only if GSTR-7 is filed but we could file it on 08 November.

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Harihar Mandal
Category GST   Report

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