GST TDS and TCS: Complete Guide for Indian Businesses

GST TDS vs GST TCS: The Difference

GST TDS (Tax Deducted at Source) under Section 51 applies to specified government entities and PSUs that deduct 2% (1% CGST + 1% SGST/IGST) from payments to suppliers above ₹2.5 lakh per contract.

GST TCS (Tax Collected at Source) under Section 52 applies to e-commerce operators who collect 1% (0.5% CGST + 0.5% SGST) on net taxable supplies made through their platform.

Who Must Deduct GST TDS?

• Central and State Government departments
• Local authorities
• Government agencies and PSUs notified by the government
• Certain authorities established under Acts of Parliament

Threshold: Contracts/payments exceeding ₹2.5 lakh

GST TDS Filing Obligations

Deductors must:

1. Register on GST portal as TDS deductor (separate registration)
2. Deduct 2% from contract payments
3. Deposit TDS by the 10th of the following month via GSTR-7
4. Issue TDS certificate to supplier within 5 days of deposit

How Suppliers Claim TDS Credit

TDS deducted by government departments appears in the supplier's Form GSTR-7A and is auto-populated in the Electronic Cash Ledger. The supplier can use this credit to offset GST liability.

GST TCS for E-Commerce Sellers

If you sell on Amazon, Flipkart, Meesho, or any notified e-commerce platform:

• Platform deducts 1% TCS on your net taxable sales
• You can claim this credit by filing GSTR-8 reconciliation in your GSTR-3B

Compliance Calendar

Common Mistakes

• Government departments missing TDS registration
• Suppliers not reconciling GSTR-7A credits with their books
• E-commerce sellers not accounting for TCS in their working capital

Conclusion

GST TDS and TCS add compliance layers for both deductors/collectors and the recipients. Proper tracking ensures no credit is left unclaimed.