Register as a GST explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
To register as a GST TDS deductor, file Form GST REG-07 using TAN, obtain a deductor GSTIN, then deduct 2% TDS on taxable supplies under a contract exceeding ₹2.5 lakh, deposit it by the 10th, file GSTR-7, and issue the TDS certificate in GSTR-7A.
Overview
GST TDS is a mechanism under which specified recipients — government departments, local authorities, PSUs and other notified persons — deduct tax at source on payments to their suppliers. The deducted amount reflects in the supplier's cash ledger. Deductors need a special GST registration distinct from a normal taxpayer registration.
When It Is Required & Legal Basis
TDS is governed by Section 51 of the CGST Act, 2017 read with Rule 12 and Rule 66 of the CGST Rules, 2017. It applies where the total value of taxable supply under a contract exceeds ₹2.5 lakh (excluding GST). Registration as a deductor is mandatory under Section 24 for such notified persons.
Step-by-Step Process
- File REG-07. Apply in Form GST REG-07 selecting "Tax Deductor"; a deductor may register on the basis of its TAN where it has no PAN.
- Obtain the deductor GSTIN. The registration certificate in Form REG-06 is granted for TDS purposes.
- Deduct TDS. On qualifying contracts, deduct 2% (1% CGST + 1% SGST, or 2% IGST) from the payment where the contract value exceeds ₹2.5 lakh excluding tax.
- Deposit the tax. Pay the deducted TDS to the government by the 10th of the next month.
- File GSTR-7 and issue GSTR-7A. File Form GSTR-7 by the 10th; the system generates the TDS certificate in Form GSTR-7A for the deductee, who claims the credit in the cash ledger.
Forms, Attachments & Fees
| Form | Purpose | Timeline |
|---|---|---|
| REG-07 | Deductor registration (TAN-based) | Before deducting TDS |
| REG-06 | Registration certificate | On approval |
| GSTR-7 | Monthly TDS return | By 10th of next month |
| GSTR-7A | TDS certificate to deductee | System-generated |
No government fee applies to deductor registration.
Timeline & Due Dates
Both the deposit of TDS and the GSTR-7 return are due by the 10th of the month following deduction. No TDS is deducted where the supplier's location and the place of supply differ from the recipient's State (to avoid mismatch), as provided in Section 51.
Penalty for Delay / Non-compliance
Late deposit of TDS attracts interest at 18% under Section 50. Late GSTR-7 draws a late fee of ₹100 per day each under CGST and SGST (₹200/day total), subject to the prescribed cap. Failure to furnish the TDS certificate can also attract a late fee under Section 51(4).
Practical Tips
- Test the ₹2.5 lakh threshold contract-wise (excluding GST), not invoice-wise.
- Do not deduct where the supplier and place of supply are in a State different from the recipient's registration.
- Deposit and file GSTR-7 together by the 10th to avoid dual late fees and interest.
- Reconcile deducted amounts with suppliers so their cash-ledger credit matches.