GST TDS Compliance for April 2026: Everything Deductors Need to Know

Tax Deducted at Source under the GST framework is a critical compliance obligation that applies to a defined category of entities. For the tax period of April 2026, deductors are required to ensure timely deduction, deposit, and return filing in accordance with the provisions of Section 51 of the Central Goods and Services Tax Act, 2017, read with Rule 66 of the CGST Rules, 2017. Missing the prescribed deadline or making errors in computation can trigger financial consequences in the form of late fees and interest charges.

This article offers a comprehensive walkthrough of the GST TDS compliance framework applicable for April 2026, covering the legal basis, applicability criteria, applicable rates, due dates, procedural requirements, and the consequences of non-compliance.

The statutory basis for GST TDS is rooted in Section 51 of the CGST Act, 2017. This provision mandates specific categories of persons to deduct tax at source while making payments to suppliers of goods or services where the total value of supply under a contract surpasses the prescribed monetary threshold. The procedural aspects governing how and when to deduct, deposit, and report TDS are laid down under Rule 66 of the CGST Rules, 2017.

It is important to note that the TDS obligation arises independently of whether the supplier is registered or not, and deductors must exercise due diligence in computing the correct deductible amount.

Who Is Required to Deduct GST TDS?

Not every registered person under GST is obligated to comply with TDS provisions. The obligation is confined to a specific set of entities as enumerated below:

  • Government departments and establishments at the Central and State level
  • Local authorities such as municipal corporations and panchayats
  • Governmental agencies set up under statute or executive order
  • Notified persons as designated from time to time through government notifications under the CGST Act

Entities falling outside these categories are not required to deduct TDS under GST, irrespective of the size or value of their procurement contracts.

Threshold for TDS Applicability

A key prerequisite for triggering the TDS obligation is that the value of the taxable supply under a single contract must exceed ₹2,50,000. Crucially, this threshold is computed excluding GST and applicable cess. The gross contract value inclusive of taxes should not be used for the purposes of this determination.

If Mr. Sharma enters into a contract on behalf of a government department for procurement of printing services worth ₹2,75,000 (excluding GST), TDS under GST shall be applicable since the contract value exceeds the ₹2,50,000 threshold.