GST TDS

GST TDS (Tax Deducted at Source under Goods and Services Tax) is a provision under Indian GST law where the recipient of goods or services must deduct a specified percentage from the payment to the supplier and remit it to the tax department. GST TDS is applicable only when the total value of such supply, under an individual contract, exceeds ₹2.5 lakh. The GST TDS rate is 2% (1% CGST + 1% SGST for intra-state transactions and 2% IGST for inter-state transactions).

Enable GST TDS

Before deducting GST TDS from your transactions, you need to enable it. Here’s how:

• Go to Settings.
• Select Taxes under Taxes and Compliance.
• Navigate to GST TDS Settings.
• Slide the Enable GST TDS toggle.
• Click Save.

The GST TDS taxes will now be automatically populated in your organisation.

Create Customers or Vendors

To create a customers and enable GST TDS:

• Go to Sales on the left sidebar and select Customers.
• Click + New in the top-right corner of the page.
• Enter the required details in the New Customer page.
• In the Other Details section:
  • Select the GST Treatment of the customer.
  • Check the option Is GST TDS applicable?.

• Click Save.

Similarly, you can create vendors and enable GST TDS for them in the vendor creation page.

Create Transactions

You can create invoices and bills and deduct GST TDS on them. Let’s see how you can create an invoice and deduct GST TDS:

• Go to Sales on the left sidebar and select Invoices.
• Click + New in the top-right corner of the page.
• In the New Invoice page, enter all the required details.
• Click Select a GST TDS above the Items table and select a GST TDS tax from the dropdown.

• GST TDS will be applied to all the line-items in your transaction. To remove GST TDS from a specific line-item, click More next to the item’s Amount field. From the dropdown, select Show Additional Information and uncheck the Deduct GST TDS option.

• You can view the total GST TDS deducted for the transaction in the GST TDS section.
• Click Save.

Similarly, you can create bills for your vendors, and deduct GST TDS.

Record Payment

While recording a payment for your invoices and bills, you can record the GST TDS deducted from the transaction. Let’s see how you can do this in an invoice:

• Go to Sales on the left sidebar and select Invoices.
• Click Record Payment at the top of the invoice’s Details page, and select Record Payment from the dropdown.
• Enter all the required details in the new page.
• Check the option Yes next to the GST TDS Deducted?.
• You can view the deducted GST TDS in the GST TDS Amount field.

• Click Record Payment.

Similarly, you can record bill payments and the deducted GST TDS.