TDS and TCS under GST: formula sheet

Key formulas

Persons who may be mandated to deduct (section 51(1))

Central/State Government department or establishment | local authority | Governmental agencies | persons notified on Council's recommendation

Only those mandated must deduct. Learn all four categories.

Threshold

Total value of supply under a contract > ₹2,50,000 (excluding CGST, SGST/UTGST, IGST and cess)

Test is 'exceeds'. Exactly ₹2,50,000 does not attract TDS. Test is per contract.

Rate (intra-State)

1% CGST + 1% SGST/UTGST = 2% in total

Section 51(1) gives 1% for central tax. Apply on payment made or credited.

Rate (inter-State)

IGST at 2% (proviso to section 20, IGST Act)

Same 2% overall, split differently.

TDS amount

TDS = 2% × value of supply excluding GST

Value excludes taxes shown in the invoice.

Exclusion

No TDS if supplier's location and place of supply are in a State/UT different from recipient's State/UT of registration

Both conditions must be met: location AND place of supply differ from the recipient's State.

Payment to Government

Within 10 days after the end of the month of deduction (section 51(2))

Deposit and return detail are covered in the related topic on TDS deposit, returns and certificates.

Rate and threshold of TDS

TDS = 1% × value of supply, if value of supply under a contract > ₹2,50,000

Value excludes CGST, SGST/UTGST, IGST and cess shown in the invoice. Threshold is on total value under a contract.

Deposit time limit

Within 10 days after the end of the month of deduction

Section 51(2). Example: deduction in June, pay by 10 July.

GSTR-7 due date

On or before the 10th day of the month succeeding the month of deduction

Rule 66(1), wording inserted w.e.f. 1 November 2024.

Certificate

FORM GSTR-7A, made available to the deductee on the common portal

Section 51(3) and rule 66(3). It is based on the GSTR-7 return filed.

Days of delay in filing GSTR-7

Days of delay = actual filing date − due date

Section 47(1) names only returns under sections 39, 45 and 52, so do not apply its ₹100 per day and ₹5,000 figures to GSTR-7 unless the question gives the applicable provision. Any late fee is separate from interest on late payment.

Interest on non-payment

Interest under section 50(1) plus tax deducted

Section 51(6).

TCS amount

TCS = notified rate × net value of taxable supplies

Rate is notified by the Government and cannot exceed 1%. The base is for the month and covers all registered suppliers on the platform.

Net value of taxable supplies

Net value = taxable supplies made through the operator in the month − taxable supplies returned to suppliers in that month

Leave out services notified under Section 9(5). Count only supplies where the operator collects the consideration.

Payment of TCS

Due within 10 days after the end of the month of collection

Section 52(3). The operator pays it in the prescribed manner.

Monthly statement

FORM GSTR-8 within 10 days after the end of the month

Section 52(4) and Rule 67. It shows outward supplies, returns, and TCS collected.

Annual statement

Before 31 December following the financial year

Section 52(5). The Commissioner may extend the date by notification.

Time limit for a late statement

Not allowed after 3 years from the due date

Section 52(15). The Government may allow it later by notification.

Matching items

State of place of supply and net taxable value, GSTR-8 against GSTR-1

Rule 78. The matching date follows any extension of the GSTR-1 due date.

Notice for information

Notice by an authority not below Deputy Commissioner; reply within 15 working days; penalty up to ₹25,000

Section 52(12) to (14). The penalty is without prejudice to Section 122.

Who can revise

Registered person + TRAN-1 already submitted electronically within the time in rules 117, 118, 119 or 120

A person who never filed within time is not covered by this rule.

Number of revisions

Revision allowed once

The rule says 'may revise such declaration once'. A second revision is not permitted.

Mode and form

Electronically, in FORM GST TRAN-1, on the common portal

The revised declaration uses the same form.

Time limit

Period in rules 117 to 120, or further period extended by the Commissioner

Rule 117(1): ninety days from the appointed day, extendable by a further period not exceeding ninety days on the Council's recommendation.

Credit entry

Credit specified in TRAN-1 is credited to the electronic credit ledger (FORM GST PMT-2)

Stated in rule 117(3).

Quick revision

• Section 51 TDS rate is 1% on payment made or credited to the supplier.
• TDS applies only where total contract value exceeds ₹2,50,000, and the value excludes GST and cess shown in the invoice.
• Deductors are notified: Government departments, local authorities, governmental agencies and other notified persons.
• No TDS if supplier's location and place of supply are in a different State or Union territory from the recipient's registration.
• TDS and TCS are both deposited within ten days after the end of the month of deduction or collection.
• Deductor failing to pay the deducted amount pays interest under Section 50(1) in addition to the tax.
• The deductee claims TDS credit in the electronic cash ledger, based on the deductor's return under Section 39(3).
• No refund to the deductor if the amount has been credited to the deductee's electronic cash ledger.
• Section 52 TCS applies to e-commerce operators who are not agents, at a notified rate not exceeding 1%.
• TCS base is net value of taxable supplies: supplies made through the operator less supplies returned in the month.
• Operator files a monthly statement within ten days after month-end and an annual statement before 31 December after the financial year.
• Rule 120A: FORM GST TRAN-1 can be revised once, within the time in Rules 117 to 120 or as extended by the Commissioner.

Common mistakes

• Deducting TDS when the contract value is exactly ₹2,50,000. Fix: The Act says the value must exceed ₹2,50,000. At exactly ₹2,50,000, no TDS applies.
• Calculating 2% on the invoice total including GST. Fix: Use the value excluding central tax, State tax, UT tax, integrated tax and cess, as the Explanation to section 51(1) states.
• Computing TDS on the invoice value including GST. Fix: Use the value excluding CGST, SGST/UTGST, IGST and cess, as the Explanation to section 51(1) says.
• Applying the ₹2,50,000 threshold to each invoice instead of the contract. Fix: The test is on total value of supply under a contract.
• Applying TCS on the gross value of sales and ignoring returns. Fix: Always deduct taxable supplies returned to suppliers in the same month before applying the rate.
• Including supplies where the customer pays the supplier directly. Fix: Section 52 covers supplies where the consideration is collected by the operator. Check who collects the payment.
• Saying TRAN-1 can be revised any number of times. Fix: Remember the word 'once' in the rule. Only one revision is allowed.
• Allowing revision by a person who never filed TRAN-1 in time. Fix: The rule applies only to a person who has already submitted the declaration within the specified time.

Exam tips

• Write the four checks (deductor, taxable supply, value above ₹2,50,000, location test) in order. Examiners give marks for each one.
• Always strip GST out of the figure before testing the threshold and computing 2%.
• In a case scenario with several States, mark the supplier's location, the place of supply and the recipient's registration State before you decide.
• Use the word 'exceeds' for the threshold. MCQs often set the value at exactly ₹2,50,000 as a trap.
• Learn the split: 1% + 1% intra-State, 2% IGST inter-State. A one-line mention scores easy marks.
• Write the section numbers: 51(2) for deposit, 51(3) for certificate, 51(6) for interest, rule 66 for the return.
• In MCQs, watch for options that use the old return date or omit the ten-day wording.
• In numerical questions, state both the due date and the number of days of delay.