Tds under gst
This query is : Resolved
12 April 2017
Rules for deducting TDS and limits for the same are changed or not under GST like for professional fees, training invoices or any other services. Also when Goods & Services are treated alike in GST isn't concept of TDS ambiguous and contradictory.
Guest
Guest
(Expert)
12 April 2017
The section 51 of the GST Act states that liability to deduct the tax at source arises when the payment is made to the supplier or credited to supplier on account of supply of taxable goods or services.The tax deducted at source shall be at the rate of 1%.
12 April 2017
Do u mean to say that now TDS is applicable on both Goods and Service ?
Guest
Guest
(Expert)
12 April 2017
Yes.The section specifically states so.
12 April 2017
It is TDS on GST and not on Income Tax. TDS for Income Tax is a separate issue not connected with GST.
12 April 2017
Yes i am asking for Income Tax only. Please reply accordingly.
12 April 2017
Income Tax is a separate Act altogether and there the TDS will be at applicable rates under various sub sections of section 194 at Amount of Invoice including the GST. There is nothing in income tax act indicating the TDS has been subsumed in GST.
12 April 2017
Please deduct TDS correctly on the Professional Fees etc. Your Payee will get tax credit and refund if excess TDS done. Things are quite streamlined if you deposit TDS on time and file the TDS return correctly.
12 April 2017
Right Sir, but one of the objective of GST was to remove difference between Goods and Service, but as general rule in Service Tax, on all bills more than 30K, and now TDS was their whatever the amount is for Goods; but now their is no difference between Service & Goods in GST so how would these limit apply.
02 August 2025
Great question! Here's a clear breakdown of **TDS under GST vs TDS under Income Tax**, especially about the confusion when goods and services are treated alike under GST:
---
### 1. **TDS under GST (Section 51 of CGST Act):**
* **Applicability:**
TDS is applicable when a *government or specified entities* make payments to suppliers (for goods and/or services).
* **Rate:** 1% of the *taxable value* (GST exclusive amount).
* **Scope:** Includes **both goods and services** (since GST merges them under one tax regime).
* **Thresholds/limits:** No minimum threshold — TDS must be deducted regardless of invoice size when the entity falls under the law.
---
### 2. **TDS under Income Tax Act (Sections like 194C, 194J, etc.):**
* **Applicability:**
Deducted on payments like professional fees, contract payments, rent, etc.
* **On:** The entire invoice amount including GST (since GST is part of the consideration under Income Tax law).
* **Thresholds:** There are prescribed limits depending on the section (e.g., Rs 30,000 for professional fees under 194J).
* **Separate from GST:** Income Tax TDS is **independent** and unaffected by GST rules.
---
### 3. **Why confusion arises?**
* GST **unifies goods and services** taxation, so it's natural to wonder if TDS rules for goods and services also unify.
* But **TDS under Income Tax Act remains separate**, based on the nature of payment, regardless of GST.
* Income Tax TDS still follows thresholds and rates under respective sections.
* GST TDS applies mainly to government/specified bodies, at a flat 1%, on all taxable supplies (goods or services).
---
### 4. **Practical implications:**
| Aspect | GST TDS | Income Tax TDS |
| ------------------- | ----------------------------------- | ------------------------------------- |
| Applies to | Payments by govt/spec. entities | All payers meeting thresholds |
| Rate | 1% of taxable value (excluding GST) | Varies by section (e.g., 10% on fees) |
| Goods vs Services | Treated alike | Based on nature of payment |
| Threshold | No exemption threshold | Prescribed limits apply |
| Tax Credit to Payee | Yes, on GST deducted | Yes, on TDS certificate |
---
### Summary:
* **GST TDS** is a new mechanism specific to GST law, deducted by specified entities on payments to suppliers (goods or services).
* **Income Tax TDS** remains unchanged and continues as per the Income Tax Act rules on payments including GST.
* Both can co-exist, and deductors must comply with **both** when applicable.
---
If you want, I can help prepare a quick checklist or flowchart to decide which TDS applies in your transactions. Want me to do that?
---
### 1. **TDS under GST (Section 51 of CGST Act):**
* **Applicability:**
TDS is applicable when a *government or specified entities* make payments to suppliers (for goods and/or services).
* **Rate:** 1% of the *taxable value* (GST exclusive amount).
* **Scope:** Includes **both goods and services** (since GST merges them under one tax regime).
* **Thresholds/limits:** No minimum threshold — TDS must be deducted regardless of invoice size when the entity falls under the law.
---
### 2. **TDS under Income Tax Act (Sections like 194C, 194J, etc.):**
* **Applicability:**
Deducted on payments like professional fees, contract payments, rent, etc.
* **On:** The entire invoice amount including GST (since GST is part of the consideration under Income Tax law).
* **Thresholds:** There are prescribed limits depending on the section (e.g., Rs 30,000 for professional fees under 194J).
* **Separate from GST:** Income Tax TDS is **independent** and unaffected by GST rules.
---
### 3. **Why confusion arises?**
* GST **unifies goods and services** taxation, so it's natural to wonder if TDS rules for goods and services also unify.
* But **TDS under Income Tax Act remains separate**, based on the nature of payment, regardless of GST.
* Income Tax TDS still follows thresholds and rates under respective sections.
* GST TDS applies mainly to government/specified bodies, at a flat 1%, on all taxable supplies (goods or services).
---
### 4. **Practical implications:**
| Aspect | GST TDS | Income Tax TDS |
| ------------------- | ----------------------------------- | ------------------------------------- |
| Applies to | Payments by govt/spec. entities | All payers meeting thresholds |
| Rate | 1% of taxable value (excluding GST) | Varies by section (e.g., 10% on fees) |
| Goods vs Services | Treated alike | Based on nature of payment |
| Threshold | No exemption threshold | Prescribed limits apply |
| Tax Credit to Payee | Yes, on GST deducted | Yes, on TDS certificate |
---
### Summary:
* **GST TDS** is a new mechanism specific to GST law, deducted by specified entities on payments to suppliers (goods or services).
* **Income Tax TDS** remains unchanged and continues as per the Income Tax Act rules on payments including GST.
* Both can co-exist, and deductors must comply with **both** when applicable.
---
If you want, I can help prepare a quick checklist or flowchart to decide which TDS applies in your transactions. Want me to do that?
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