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GST TDS

GST TDS (Tax Deducted at Source under Goods and Services Tax) is a provision under 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 lakh. The GST TDS rate is 2% (1% CGST + 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 Billing by creating a transaction with a payment of ₹2,45,000 and applying ₹5,000 as GST TDS.

Enable GST TDS

Before deducting GST TDS from your transactions, you need to enable it. Here’s how:

  • Go to Settings.
  • Select Taxes under Taxes and Compliance in the Organization Settings pane.
  • In the Taxes pane, select GST TDS Settings.
  • Slide the Enable GST TDS toggle.
  • Click Save.

The GST TDS taxes will now be automatically populated in your organisation.

Apply GST TDS to Customers

Here’s how to create a customer and enable GST TDS:

  • Go to Customers.
  • Click + New in the top-right corner of the page.
  • Enter the required details in the New Customer page.
  • In the Other Details section:
    • Select the GST Treatment of the customer.
    • Check the option Is GST TDS applicable?

Note: If you select Tax Deductor as the GST Treatment for the customer, the Is GST TDS applicable? option will be enabled by default.

  • Click Save.

Apply GST TDS to Transactions

You can create invoices and deduct GST TDS on them. Here’s how:

  • Go to Sales and select Invoices.

  • Click + New in the top-right corner of the page.

  • In the New Invoice page, enter all the required details.

  • Click the Select a GST TDS dropdown above the Items table and select a GST TDS tax.

    Note: The Select a GST TDS dropdown will be displayed only when GST TDS is enabled for the customer.

GST TDS will be applied to all the line-items in your transaction.

To remove GST TDS from a specific line-item:

  • Click More next to the item’s Amount field and select Show Additional Information.

  • Uncheck Deduct GST TDS.

    Pro tip: If you have many line items with GST TDS applied by default, but you only want it applied to specific line items, manually unchecking each one can be time-consuming. To apply GST TDS to only specific items, click Bulk Actions at the top right of the item table and select Bulk Update Line Items. Then choose Remove GST TDS to clear it from all line items, and manually select Deduct GST TDS for the specific ones you want.

  • You can view the total GST TDS deducted for the transaction in the GST TDS section.

  • Click Save.

    Note: The GST TDS deduction will not be applied to the total invoice amount and will not impact any accounts directly. It can only be recorded at the time of payment.

Record Payment

While recording a payment for your invoice, you can record the GST TDS deducted from the invoice. Here’s how:

  • Go to Sales and select Invoices.
  • Click Record Payment at the top of the invoice’s details page.
  • Select Record Payment from the dropdown.
  • Enter all the required details in the new page.
  • Check the option Yes next to the GST TDS Deducted?.
  • You can view the deducted GST TDS in the GST TDS Amount field.

Note: If you wish to record payment only for the deducted GST TDS, enter 0 in the Amount Received (INR) field.

  • Click Record Payment.

You also have the option to record GST TDS for an invoice payment through the Payments Received module. Here’s how:

  • Go to Payments and select Payments Received.
  • Click + New.
  • Enter the required details.
  • In the Unpaid Invoices table:
    • Click Add GST TDS below the GST TDS field for the invoice where you want to apply the GST TDS.
    • You can click Clear GST TDS to clear the GST TDS applied to the invoice.
  • Click Save as Paid.

Note: If you want to record only the GST TDS and not the invoice payment amount, enter 0 in the Amount Received field.

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