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GST TDS

GST TDS (Tax Deducted at Source under Goods and Services Tax) is a provision under the Indian GST law where the recipient of goods or services must deduct a specified percentage from the payment to the supplier and remit it to the tax department. GST TDS is applicable only when the total value of such supply, under an individual contract, exceeds ₹2.5 lakhs. The GST TDS rate is 2% (1% CGST and 1% SGST for intra-state transactions and 2% IGST for inter-state transactions).

Scenario: A government department contracts a supplier for services worth ₹2,50,000. As per GST TDS rules, 2% is deducted, amounting to ₹5,000. The supplier receives ₹2,45,000. This can be recorded in Zoho ERP by creating a transaction with a payment of ₹2,45,000 and applying ₹5,000 as GST TDS.

Enable GST TDS

To enable GST TDS in your Zoho ERP organisation:

  • Go to Settings.
  • Under Organization Settings, select Taxes under Taxes & Compliance.
  • In the next page, select GST TDS Settings in the left pane.
  • Enable the toggle next to Enable GST TDS.
  • Select for whom you want to configure GST TDS in your organisation. The available options are: Customers, Vendors, and Customers and Vendors.
  • Click Save.

The GST TDS will now be configured in your ERP organisation.

Create Customers and Vendors

To create customers and vendors and enable GST TDS for them:

  • Go to Sales on the left sidebar, and in the next page, select Customers in the module bar. Or, go to Purchases on the left sidebar, and in the next page, select Vendors in the module bar.
  • Click + New in the top right corner.
  • In the next page, fill in the required details. Ensure that you provide the GST treatment for your customers and vendors to enable GST TDS for them.
  • Click Save.

The customer or vendor will be created, and GST TDS will be enabled for them.

Create Transactions

You can create invoices and bills for your customers and vendors, and deduct GST TDS from them. Here’s how:

  • Go to Sales on the left sidebar, and in the next page, click the Invoices dropdown in the module bar, and select Invoices.
    • Go to Purchases on the left sidebar, and in the next page, click the Bills dropdown in the module bar, and select Bills.
  • Click + New in the top right corner.
  • In the next page, fill in the required details.
  • Click the Select a GST TDS dropdown above the Items Table, and select the required GST TDS rate.
  • GST TDS will be applied to all the line items in the transaction. To remove it for a specific line item, click the More icon next to it, select Show Additional Information from the dropdown, and uncheck the Deduct GST TDS option.
  • Click Save.

The transaction will be recorded, along with the GST TDS.

Record Payment

While recording payment for your invoices and bills, you can record the GST TDS deducted from the transaction. Here’s how:

  • Open the transaction for which you want to record payment.
  • In the details page, click Record Payment.
  • In the next page, enter all the required details.
  • Select Yes next to GST TDS Deducted?. You can view the deducted amount in the GST TDS Amount field.
  • Click Record payment.

To record payment for GST TDS for invoices in the Payments Received module:

  • Go to Sales on the left sidebar.
  • In the next page, click the Payments dropdown in the module bar, and select Payments Received.
  • Click + New in the top right corner.
  • In the next page, enter the required details.
  • In the Unpaid Invoices table, click Add GST TDS below the GST TDS field where you want to apply the GST TDS.
  • Click Save as Paid.

The GST TDS payments will be recorded. Similarly, you can record GST TDS payments for bills in the Payments Made module.

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