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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 Spend 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 on the left sidebar.
    (OR)
    Click Settings in the top right corner of the page.
  • Click Taxes under Taxes & Compliance.
  • Navigate to GST TDS Settings.
  • Slide the Enable GST TDS toggle.
  • Click Save.

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

Add GST TDS to Vendors

Here’s how you can create a vendor and enable GST TDS for them:

  • Click Vendors under Purchases.
  • Click + New in the top right corner of the page.
  • Enter the required details.
  • Select the GST Treatment of the vendor.
  • Check the Is GST TDS applicable? option.
  • Click Save.

You can edit an existing vendor and add GST treatment for them as well.

Add GST TDS to Bills

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

  • Go to Bills under Payables.
  • Click + New in the top right corner.
  • Fill in the necessary details.
  • Click Select a GST TDS above the Items table and select a GST TDS tax from the dropdown.
  • 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. From the dropdown, select Show Additional Information and uncheck the Deduct GST TDS option.
  • You can view the total GST TDS deducted for the transaction in the GST TDS section.
  • Click Save.

Record Payments

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

  • Click Bills under Payables.
  • Click Record Payment at the top.
  • Fill in the necessary details.
  • Check Yes next to the GST TDS Deducted? option.
  • 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.
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