The model GST Law released by the Ministry of Finance contains provisions relating to tax deducted at source. Though TDS provisions already exist in most of the state VAT Acts for payments in case of works contract, there is no such concept of TDS under service tax.

 

TDS provisions under GST are summarised below for a better understanding.

 

Applicability of TDS provisions:

As per the draft GST law, the Central Government/State Government may mandate certain category of persons to deduct tax from the payments made to the suppliers of taxable goods/service where the total value of supply, under a contract, exceeds rupees ten lakh.

The various departments which may come under TDS are:

1 a department or establishment of the Central or State Government, or

2 Local authority

3 Governmental agencies

4 such persons or category of persons as may be notified