The Goods and Services Tax (GST) framework in India not only focuses on tax collection but also ensures transparency through mechanisms like TDS (Tax Deducted at Source) and TCS (Tax Collected at Source). In 2025, these rules continue to play a crucial role in compliance, monitoring transactions, and revenue collection.

1. What is GST TDS?

TDS under GST is the tax deducted at source by specified government departments, agencies, or notified entities while making payments to suppliers of taxable goods or services.

• Rate: 2% (1% CGST + 1% SGST) on intra-state supplies, or 2% IGST on inter-state supplies.
• Applicability: Deducted when contract value exceeds ₹2.5 lakhs (excluding GST).
• Deductor: Government departments, public sector undertakings, local authorities, and notified entities.

Example: A government department buys IT services worth ₹5 lakhs from a vendor. The department will deduct 2% GST TDS before making payment.

2. What is GST TCS?

TCS under GST is the tax collected at source by e-commerce operators from suppliers who sell goods/services through their platform.

• Rate: 1% (0.5% CGST + 0.5% SGST) or 1% IGST.
• Applicability: Applicable to online marketplaces like Amazon, Flipkart, Zomato, Swiggy, etc.
• Collector: The e-commerce operator collects TCS from the supplier and deposits it with the government.

Example: A seller lists a product worth ₹10,000 on Amazon. Amazon collects 1% TCS before paying the seller.

3. Difference Between GST TDS and TCS

4. Compliance for Businesses in 2025

• GST TDS: Deductors must deposit tax and file GSTR-7 by the 10th of the following month.
• GST TCS: E-commerce operators must deposit tax and file GSTR-8 by the 10th of the following month.
• Both suppliers and operators must reconcile returns to ensure smooth input credit.

Conclusion