Hi friend, Now a days we are hearing about TDS in GST and I am sure we must be aware of most of the part but here I am going to explain it in more details with example to make it easy for you.
(If you wish to see entry in tally write down on gstintally786@gmail.com) 

 Let us understand it in detail :
What is TDS under GST : TDS referred as Tax Deducted at source which we are very much aware in case of Direct Tax but under GST what is TDS referred as?

 TDS under GST is the way to collect Tax at certain percentage on amount payable by receiver of Service or Goods. It means buyer must deduct TDS on Expenses while making payment and he must deposit the amount in favor of government in next month on or before 10th of month.
TDS under GST is a revenue for the Government.

 What is Rate of TDS underGST?
TDS Rate is 2% (1% CGST & 1%SGST). (Rate may change according to latest notification of Government)

 Who is liable to deduct TDS?
  • Local Authority, or
  • Government Agencies, or 
  • Such Persons or Persons as may be notified by the Government, or 
  • A department or an establishment of the Central Government or State Government
As per latest notification dated on 13th Sep 2018 few more entities were added in list who can deduct TDS.
  • An authority or a board or any other body which has been set up by Parliament or a State Legislature or by a government, with 51% equity (control) owned by the government. 
  • A society established by the Central or any State Government or a Local Authority and the society is registered under the Societies Registration Act, 1860. 
  • Public sector undertakings

Assessable Amount of TDS : 
Now question arise what would assessable amount for deducting TDS? TDS will be deducted on Principal Amount excluding GST. It means deductee will deduct TDS excluding GST amount.

 Time of TDS deduction: TDS will be deducted at time of making Payment by recipient. Payment time may be or may not be the same month of Invoice.

Let us understand all the concept with one Live Example step by step
(Please note that in this example State and Place of Supply is ignored. It will be explained further)
  1. KGN India Pvt Ltd have rendered a service of Rs 300000+18% GST to a National Insurance Ltd (PSU) on 10th Nov 2018.  
  2. Invoice was raised on 15th Nov for the same of Rs 354000 (300000+54000 GST) 
  3. Now National Insurance Ltd make the payment on the date of 10th Dec 2018. Recipient will pay the amount Payable = 300000 + 54000 – 6000 (2% TDS on 300000) = 348000 Rs (TDS @ 2% includes 1% CGST & 1% SGST and in case of IGST then complete 2%) 
  4. KGN India received the amount of Rs 348000 but question arise how to claim ITC for the same? Can KGN India Pvt Ltd claim ITC on this?
  5. After deducting TDS, National Insurance will file GST Return as GSTR7 on or before 10th Jan 2019 
  6. Once Payment done by National Insurance whiling GSTR7 they need to Issue TDS certificate within 5 Days of filing as GSTR7A estimated date may be 15th Jan 2019 
  7. Now KGN India has received TDS certificate for the amount and they can claim 6000 Rs as an ITC. 
  8. As soon as National India file GSTR7 and make the payment of TDS on the name of KGN India Pvt Ltd same amount gets reflected in E-Cash ledger balance of KGN India Pvt ltd. 
  9. Now KGN India Pvt Ltd can view E-Cash ledger balance on GSTIN Portal they will be able to see the amount of TDS deposited by National India Ltd & KGN India now can utilized the amount for Payment of GSTR3B Liability for the month of Dec 2018. 
  10. Please note that ITC can not be claimed by KGN India Pvt ltd unless National Insurance make the payment on portal.
Now Question arise when will be the liability to deduct TDS be attracted?
There are case where TDS will be deducted and there may be case where TDS may not be applicable. Let us understand the case by scenarios

 Scenario A : KGN India Pvt Ltd Mumbai based GSTIN holder rendered service to ONGC Ltd Mumbai based GSTIN holder and place of service is also within same state.
This case is intrastate transaction so it attracts TDS

 Scenario B : KGN India Pvt Ltd Mumbai based GSTIN holder rendered service to ONGC Ltd Gujrat based GSTIN holder and place of supply is Gujrat.
This is interstate transaction and attracts TDS.

 Scenario C : KGN India Pvt Ltd Mumbai based GSTIN holder rendered service to ONGC Ltd Gujrat based GSTIN holder and place of supply is Mumbai.
Now in this case even though it is interstate transaction but does not attract TDS.

General FAQ on this topic
Question: Is GST Registration mandatory for deductee?
Answer :  Yes it is mandatory to get GSTIN until TDS can not be deducted.

 Question: What is time to pay TDS?
Answer:   It should be paid by deductee on 10th of Next month.

 Question: Is there any TDS certificate?
Answer: Yes, there is TDS certificate of GSTR7A will be issued by deducted within 5 days of filing GSTR7 by deductee.

 Question: How to claim ITC for that?
Answer: Amount deposited by deductee will be available in E-Cash ledger on GSTIN portal to utilized for liability adjustment.

 Question: What is Bill Limit to deduct TDS?
Answer:  Bill value should be above 2.5 Lakhs including GST

 So, I hope you now clear picture about this topic. If you really like the topic please share your feedback in comment box or on mail id gstintally786@gmail.com
If you want to see how to book Entry for this in Tally please write down on mail id. I will help you on this.
For any further query or feedback related to GST & Tally reach me on mentioned mail id.

 Regards,
Parvez Ansari