Two Different Mechanisms
| Feature | TDS (Section 51) | TCS (Section 52) |
|---|---|---|
| Who deducts/collects | Government departments, PSUs, local authorities, agencies | E-commerce operators (Amazon, Flipkart etc.) |
| From whom | Suppliers of goods/services to govt entities | Suppliers selling through their platform |
| When triggered | Contract value > ₹2.5 lakh | On every transaction |
| Rate | 1% CGST + 1% SGST (intra-state) or 2% IGST (inter-state) | 0.5% CGST + 0.5% SGST or 1% IGST |
| Return form | GSTR-7 | GSTR-8 |
| Due date | 10th of next month | 10th of next month |
TDS Under Section 51
Who deducts:
- Department / establishment of Central / State Government
- Local authority
- Government agencies
- Public Sector Undertakings (PSUs)
- Societies established by Central/State Government
Trigger: Total value of supply under a contract exceeds ₹2.5 lakh (exclusive of GST). TDS is deducted from the payment to the supplier.
Rate: 2% (1% CGST + 1% SGST) on intra-state; 2% IGST on inter-state.
Process:
- Deductor deducts 2% TDS from payment
- Pays it to government via TDS challan
- Files GSTR-7 by 10th of next month
- Issues TDS certificate (Form GSTR-7A) to supplier
- Supplier sees the TDS credit in their electronic cash ledger
TCS Under Section 52
Who collects: Every e-commerce operator who allows other suppliers to sell through their platform (Amazon, Flipkart, Meesho, Zomato, Swiggy etc.). Operators selling their own goods/services don't collect TCS.
Rate: 1% (0.5% CGST + 0.5% SGST) intra-state; 1% IGST inter-state.
On what: Net taxable value of supplies = Total value of taxable supplies − Sales returns.
Process:
- E-commerce operator deducts TCS at source from supplier payments
- Pays it to government
- Files GSTR-8 by 10th of next month
- Supplier sees TCS credit in their electronic cash ledger
- Supplier claims this credit against their GST liability when filing GSTR-3B
How Suppliers Claim TDS/TCS Credit
- The TDS/TCS amount auto-flows to your electronic cash ledger after the deductor files GSTR-7/8
- You can use this balance to pay your tax in GSTR-3B
- Or claim a refund of unutilised TDS/TCS through RFD-01
Registration for Deductors/Collectors
TDS deductors and TCS collectors must register separately under GST (different from regular registration):
- TDS deductor — Form GST REG-07
- TCS collector — Form GST REG-07 (with relevant declaration)
No turnover threshold — registration is mandatory the moment activity starts.
iAccounting tracks TDS deducted by government clients automatically — you see your cash ledger balance updating after every GSTR-7 filed by the deductor. For e-commerce sellers, TCS reconciliation with Amazon/Flipkart/Meesho is built-in.
See TDS/TCS handling →Continue Learning
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