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TDS on GST value

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Aswathy Nair

41 Points Posted on 01 June 2022

Is tds u/s 194Q deducted on GST value also or basic value?

Replies (5)

Quick Summary

This discussion clarifies whether Tax Deducted at Source (TDS) under Section 194Q applies to the basic value of a transaction or includes the Goods and Services Tax (GST). Generally, if GST is itemised separately in the invoice, TDS is deducted only on the basic value. However, if TDS is deducted at the time of payment and GST isn't separately identified, it may be applied to the total amount.

Sounik Mukherjee

Area Manager (Taxation)

82 Points Posted on 01 June 2022

Accordingly with respect to TDS under section 194Q of the Act, it is clarified that when tax is deducted at the time of credit of amount in the account of seller and in terms of the agreement or contract between the buyer and the seller, the component of GST comprised in the amount payable to the seller is indicated separately, tax shall be deducted under section 194Q of the Act on the amount credited without including such GST. However, if the tax is deducted on payment basis because the payment is earlier than the credit, the tax would be deducted on the whole amount as it is not possible to identity that payment with GST component of the amount to be invoiced in future.