TDS under section 51 of CGST ACT, 2017


Provisions related to TDS under section 51 of CGST ACT, 2017

Table of Contents:

  1. Deciding CGST /SGST or IGST applicable?
  2. Who shall be liable to deduct TDS?
  3. Threshold limit for non-deduction?
  4. What is the rate of TDS?
  5. Conditions on Place of supply, suppliers and recipient for TDS applicability?
  6. Registration for TDS deduction?
  7. What are the filling requirements?
  8. Fees Penalties and Interest?


The TDS provisions under this ACT is inserted by the government to have control over the transactions in the economy. This concept is very much similar to that of TDS under Income Tax act as under income tax  a person paying an amount for the services taken by him to another person is required to hold tax and deposit the same to the government in the name of such other person which is further given as a credit to the other person, same is the concept in GST Act.

Here in GST TDS is deducted by one person( recipient) and credit is given to the other person(supplier)

For applicability of TDS the transaction under consideration must include goods or services. Goods and services are defined under GST Act. Goods are any kind of movable property and anything other than goods are classified as services.

The second requirement for TDS applicability is the SUPPLY. The transaction under consideration must constitute a supply i.e. it should be sale, exchange, barter, lease etc. and for the business or for furtherance of business with or without consideration as the case may be.


  1. Deciding CGST /SGST or IGST applicable ?

The next thing is to be done is deciding the transaction to be intra sate or inter state, for this purpose section 7 to 14 of IGST Act,2017 to be referred. Here it is relevant so as to decide whether TDS deducted to be deposited as CGST and SGST/UTGST or as IGST.


  1. Who shall be liable to deduct TDS ?

TDS shall be deducted by a department or establishment of the Central Government or State Government; or (b) local authority; or (c) Governmental agencies; or (d) notified persons.


  1. Threshold limit for non deduction ?

Threshold limit for TDS deduction is Rs. 2,50,000 i.e. Total Value of supply under a contract must be greater than Rs. 2,50,000 (exclusive of GST) per tax invoice.


  1. What is the rate of TDS ?

Rate of TDS: 1% of the value i.e. in case of intra state supply CGST @ 1% and SGST/ UTGST @ 1%  or in case of inter state supply IGST @ 2%.

  1. Conditions on Place of supply , suppliers and recipient for TDS applicability ?

No TDS will be deducted in case location of supplier and place of supply is different from the state of registration of recipient i.e. either location of supplier or place of supply(destination) state must be same as that of recipients state.



Supplier, place of supply and recipient in same state

Intra state supply

TDS will be deducted as CGST and SGST

Supplier and place   of supply in different state

Inter state supply

TDS will be deducted as IGST

Supplier and place    of supply in same state and recipient in different state

Intra state supply

No TDS deduction


  1. Registration for TDS deduction ?

As per sec 24 of CGST Act every person who is required to deduct TDS is required to get compulsorily registered under GST as a TDS deductor.


  1. What are the filling requirements ?

The amount deducted as TDS is to be deposited to the government by 10th of the next month succeeding the month in which TDS is deducted by filling GSTR-7 return.


The amount deposited as TDS is reflected in the e-cash ledger of the supplier. Such amount can be utilized by the supplier for discharging his liability towards tax interest fee or any other amount.


  1. Fees Penalties and Interest ?

The deductor is required to issue TDS certificate to the deductee within 5 days of deducting TDS failing which fee of Rs. 100 per day subject to maximum of Rs. 5000 shall be payable by the deductor.


TDS not deducted or not paid up to due date then the same will be recovered along with interest applicable.


As per section 47 any failure to file the TDS return on time will be subject to late fee of Rs. 100 per day subject to maximum of Rs. 5000.


Following table shows consequences of not complying with the TDS provisions:

TDS not Deducted

Interest to be paid along with the TDS amount

TDS certificate not issued or delayed in issuance

Late fee of Rs. 100 per day subject to maximum of Rs. 5000

Tds deducted and not paid or paid after due date

Interest to be paid along with the TDS amount

Late filling of TDS return

Late fee of Rs. 100 per day subject to maximum of Rs. 5000