TDS & TCS under GST: A Simple Guide to Section 51 and 52
Meet Ravi – A Scrap Metal Trader Who Faced a GST Surprise
Ravi is a 38-year-old small business owner from Indore. He runs a trading business in scrap metal, buying from local sellers and supplying to manufacturers. His business grew steadily over the years, and he registered under GST as soon as it was introduced.
One day, he received a payment from a government department for a bulk scrap order. But the payment was ₹4,90,000 instead of ₹5,00,000. Confused, Ravi called the accounts department and was told,
“We’ve deducted TDS under Section 51 of CGST. Please check your GSTR-7A certificate.”
Ravi had never heard of TDS under GST. And this wasn’t the last time. Another month, Flipkart deducted TCS from his sales. That’s when he realized how important it is to understand TDS and TCS under GST (Section 51 and 52).
Let’s break it down in simple words to help traders like Ravi stay compliant and avoid surprises.
📘 Section 51 – TDS under GST
Who Needs to Deduct TDS?
The following entities must deduct Tax Deducted at Source (TDS) under GST:
✅ Government departments
✅ Local authorities (e.g., municipal corporations)
✅ Notified bodies such as Public Sector Undertakings (PSUs)
When is TDS Applicable?
TDS is applicable when the contract value exceeds ₹2.5 lakh (excluding GST).
Rate: 2% (1% CGST + 1% SGST or 2% IGST)
Key Compliance Rules:
🔹 TDS must be deducted at the time of payment or credit to the supplier, whichever is earlier.
🔹 Deducted TDS must be deposited to the government by the 10th of the following month.
🔹 The deductor files a monthly return in Form GSTR-7.
🔹 The supplier (like Ravi) gets a TDS certificate in Form GSTR-7A.
✅ Important Note:
Even if a government department is not liable to pay GST, it must still register separately as a TDS deductor.
📗 Section 52 – TCS under GST
Who Needs to Collect TCS?
This applies to E-commerce Operators, such as:
✅ Amazon
✅ Flipkart
✅ Meesho
✅ Snapdeal
They must collect Tax Collected at Source (TCS) on behalf of sellers who sell through their platforms.
When is TCS Applicable?
Rate: 0.5% (0.25% CGST + 0.25% SGST) or 0.5% IGST
Collected on the net value of taxable supplies made through the platform
Key Compliance Rules:
🔹 TCS must be collected on the payment made to the seller (after returns and discounts).
🔹 Collected TCS must be deposited by the 10th of the next month.
🔹 E-commerce platforms must file Form GSTR-8 monthly.
✅ Important Note:
E-commerce companies must register separately for TCS even if they already have a GST number.
📌 Why Should You Care About TDS & TCS Under GST?
1. Affects Your Cash Flow
If TDS or TCS is deducted and not reflected properly in your GST return, your Input Tax Credit (ITC) or refund may be delayed.
2. Ensures Transparency
These deductions help the government track high-value transactions and ensure tax compliance.
3. Avoid Penalties
Not registering for TDS or TCS (if applicable) or not filing the returns in time can result in:
Interest
Penalties
Blocking of ITC
💡 How Ravi Solved His Problem
After some research and speaking to his CA, Ravi:
Registered as a TDS deductee under GST
Started checking Form GSTR-7A regularly
Matched his TDS and TCS amounts while filing GSTR-3B
Contacted Flipkart and updated his TCS details in the GST portal
Now, he claims the deducted tax easily and avoids any mismatch or cash flow disruptions.
✅ Summary at a Glance
| Section | Type | Who’s Liable? | Rate | Form | Due Date |
|---|---|---|---|---|---|
| 51 | TDS | Govt depts, PSUs | 2% | GSTR-7 | 10th of next month |
| 52 | TCS | E-commerce operators | 0.5% | GSTR-8 | 10th of next month |
🧠 Tips for Traders and Businesses
✔️ Check if your buyer is a TDS deductor under GST.
✔️ Monitor GSTR-7A and GSTR-8 for accurate deductions.
✔️ Match TDS/TCS details while filing GSTR-3B.
✔️ Keep your GST compliance up-to-date to avoid penalties.
🔚 Conclusion: Know Your Tax Deductions Before They Surprise You
Ravi learned that GST is not just about charging and paying tax, but also about understanding how payments are deducted or collected by others.
Whether you’re supplying to a government body or selling through Flipkart, knowing Section 51 and 52 can save you time, money, and stress.
🧾 Moral of the Story
“In business, ignorance of tax laws is expensive. Stay informed, stay compliant.”