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Reverse charge, TDS and TCS provisions get deferred for another 3 months


The provisions related to tax deducted at source (TDS), tax collected at source (TCS) and reverse charge mechanism under GST have been deferred for another three months till Sept 30, 2018. Earlier this year in the GST Council meeting, these provisions were deferred till March 31, 2018 and now additional three months extension has been notified.

Let us do a quick recap of these provisions

Tax Deducted at Source (TDS)

  • As per Section 51 of the Central GST (CGST) Act, certain class of entities require to collect TDS of 1% each for CGST and SGST, on payments to goods or services suppliers in excess of Rs 2.5 lakhs.
  • The entities notified as of now are Government department, bodies or agencies and they need to comply with the TDS provisions on the purchase contracts exceeding Rs 2.5 lakhs.
  • The notified entities need to obtain a separate registration using either the PAN or TAN as issued under Income Tax Act
  • The TDS amount needs to be deposited and the return GSTR 7 needs to be filed by the 10th of the following month.

More information on TDS is available here.

Tax Collected at Source (TCS)

  • As per Section 52 of CGST, e-commerce companies need to collect 1 % of GST as TCS while making payment to suppliers
  • E-commerce operators need to apply for a separate registration which will be designated for collecting TCS
  • The TDS amount needs to be deposited and the return GSTR 8 needs to be filed by the 10th of the following month.

More information on TCS is available here and to be read with the updates as per this notification.

Tax payable under Reverse Charge

  • As per Section 9 (4) of CGST Act, the registered taxpayer is required to pay the tax on the inward supplies from unregistered businesses.
  • The registered dealer, in this case, needs to create a self-invoice detailing the transaction and tax amounts
  • The details of such invoices were to be reported in GSTR 2, however, the filing of GSTR 2 itself has deferred until further notification

 The notification related to postponing of TDS, TCS and Reverse Charge mechanism is available here.

Stay tuned with us for updates on GST rules and compliance requirements.

IRIS Business is a leading GST Suvidha Provider (GSP) providing easy and efficient solutions for GST (IRIS Sapphire) and E-way bill (IRIS Topaz) compliance. For a demo or to know further details please write to or visit our site



About Manoj Jain

Manoj Jain, a CA and CS, has been working with IRIS for over 8 years and is currently one of the key subject matter experts for IRIS’ GST compliance offerings. He also has been guiding the clients for GST law related matters. Before GST he was handling US compliance analyzing US financial statements and reviewing XBRL filings for US and India market. He enjoys listening to music and traveling.

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