Tax Deducted at Source (TDS) under GST is an important compliance requirement for specified entities. For March 2026, deductors must ensure timely deposit and reporting to avoid penalties.

Applicability of GST TDS

As per Section 51 of the CGST Act, 2017 read with Rule 66 of the CGST Rules, 2017, TDS under GST applies to:

• Government departments or establishments

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• Local authorities

• Government agencies

• Notified persons

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TDS is required to be deducted at 1% CGST + 1% SGST (or 2% IGST) on payments made to suppliers where:

• The value of supply under a contract exceeds ₹2.5 lakh (excluding GST)

Deposit of TDS and Filing Requirement

• TDS deducted in March 2026 must be deposited by 10th April 2026

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• Deductors must file GSTR-7 for the same period

Upon filing:

• TDS certificate in GSTR-7A is generated automatically

• Deductees can claim credit in their electronic cash ledger

Key Compliance Points

• Ensure correct GSTIN of deductee

• Verify contract value threshold applicability

• Reconcile TDS deducted with books and returns

• Avoid delays to prevent interest and late fees

Consequences of Non-Compliance

• Interest under Section 50 of the CGST Act for delayed payment

• Late fees for delay in filing GSTR-7

• Possible notices and compliance scrutiny

Practical Tips

• Maintain proper vendor classification for TDS applicability

• Automate deduction tracking in accounting systems

• File returns well before due date to avoid last-minute issues

Conclusion

Timely deduction, deposit, and reporting of GST TDS for March 2026 is essential for compliance and smooth credit flow. Proper adherence helps avoid penalties and ensures transparency in transactions.

For expert guidance on this topic, contact your tax professional today.