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tds and tcs in gst

TDS and TCS in GST (Complete Detail)

TDS under GST is the tax that the purchaser of goods and services, such as government departments under a business contract, deducts while making payments.

In the instance of TCS, it refers to the tax that eCommerce operators collect as suppliers deliver goods or services via their websites and the money that is paid to them for doing so.

This article will guide you about TDS and TCS in the GST regime. 

Without further delay, let’s get started.

What is TDS on GST?

TDS is the tax that is subtracted from a company’s payment to a person when the amount exceeds a predetermined threshold. TCS is a tax that sellers must collect from customers when they make a purchase.

Is TDS the same as TCS?

TDS is charged out whenever a payment is made, regardless of when it becomes due. At the time of sale, the seller collects TCS. 

TDS must be subtracted by the individual (or business) making the payment. The individual (or business) selling the specified products is responsible for collecting TCS.

What is TCS on GST?

TCS is the tax that the e-commerce operator collects when a seller offers some goods or services through its website, and the money for that sale is collected by the e-commerce operator.

Who will deduct TDS in GST?

  • A department, an organization of the central or state governments, or
  • A local authority, or
  • Government agency, or 
  • Any other groups of people that the government may notify.

According to the most recent notification, issued September 13th, 2018, the following entities must also deduct TDS:

  • Anybody created by a government, state legislature, or parliament that has 51% ownership (control) of the authority, board, or other entity in question.
  • A society created by the central, state, local, or local government and registered under the Societies Registration Act of 1860.
  • Public sector businesses.

Who collects TCS in GST?

Every e-commerce operator under the GST regime is liable to collect 0.5% under the CGST Act, 0.5% under the SGST Act, and 1% (under the IGST Act) on the net values of taxable supplies made through the e-commerce operator.

How is TCS calculated?

The supplier of products is required to charge a 0.1% tax upon the value received from the buyer throughout a financial year.

Guidelines to keep in mind when calculating TCS

  • Only vendors with annual sales of more than Rs 10 crore are subject to the provision.
  • Exports and goods covered by Section 206C(1)-TCS on the sale of alcohol, forest products, tendu leaves, and scrap; Section 206C(1G)-TCS on foreign remittance; and Section 206C(1F)-TCS on the sale of motor vehicles are not included in the definition of “goods.”
  • Sellers are not required to deduct TCS for products if the buyer of those goods deducts TDS.
  • If the purchaser is a city or state government, high commission, consulate, embassy, or trade representative of another country, TCS is not deducted.
  • TCS does not apply to items imported into India.

Is TCS in GST refundable?

Yes, you can claim the TCS amounts as a bank account refund or as a GST account credit on an electronic ledger.

Difference between TDS and TCS in GST

MeaningThe introduction of TDS was made to collect tax at the source.
A seller of specific items is permitted to collect tax from the buyer in addition to the selling price and send it to the government on their behalf (TCS)
Transactions IncludedTDS applies to interest, wages, brokerage fees, professional fees, commissions, real estate purchases, rent, and much more.TCS applies to wood, scrap metal, minerals, alcoholic beverages, tendu leaves, forest products, automobiles, and tolls. 
Responsibility for Tax Collection or DeductionThe tax is deducted at the source and paid back to the Central Government when a deductor makes a specific payment to another person (deducted). The buyer must pay TCS to the seller, who must then send it to the central government.
LimitsAccording to Section 194Q, TDS is charged on acquisitions of commodities over 50 lakhs.According to Section 206C, TCS is charged on the sale of goods if the value is greater than 50 lakhs (1H).
Returns FilingQuarterlyForm 24Q –  For salary, Form 26Q – Other than Salary,Form 27Q – If deductee is an NRIQuarterlyForm 27EQ is filed.
Due DateTDS deposits are required on the seventh of every month. TDS returns must be submitted on a quarterly basis.TCS must be deducted as per the guidelines in the month that the supply is made. It will be deposited to the government`s credit within ten days from the end of the month of supply.

Frequently Asked Questions(FAQs):-

1. Is TCS mandatory?

Yes, it is mandatory to pay TCS quarterly.

2. Can the seller charge TCS on an invoice?

When the selling consideration for ANY item sold (excluding exports) exceeds INR 50 lakhs, the seller is required to collect tax as TCS from the buyer at a rate of 0.1%.

3. Who pays TCS, the buyer or seller?

TCS must be collected from the buyer and paid to the government by the seller.

4. What happens if TCS is not collected?

If the person fails to collect tax at the source (TCS) or collects tax (TCS) but fails to deposit it to the government by the deadlines specified, he is required to pay interest at a rate of 1% per month, or a part thereof, on the TCS amount.


We hope this article on TDS and TCS in GST is helpful to you. For more such information, visit our website, InstaFiling. If you have any other queries, comment below and feel free to reach out to us.

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