This circular provides comprehensive guidelines for deduction and deposit of tax deducted at source (TDS) under GST by Drawing and Disbursing Officers (DDOs) in Government departments, in accordance with section 51 of the CGST Act.

It explains that GST–TDS is applicable where payments are made to suppliers of taxable goods or services under a contract exceeding ₹2.5 lakh, and that such TDS provisions were notified to come into force from 1 October 2018. DDOs acting as deductors are required to register under GST, deduct tax at the prescribed rate, deposit the deducted amount with the Government within the prescribed time, file monthly return in Form GSTR-7, and issue TDS certificates in Form GSTR-7A to the deductees.

The circular lays down two alternative procedures for deposit of GST–TDS. Under Option I, TDS is deducted and deposited bill-wise by generating a separate challan (CPIN) for each payment. Under Option II, TDS amounts deducted from multiple bills are temporarily booked under a suspense head and deposited in a consolidated manner on a weekly, monthly or other periodic basis. Detailed step-by-step processes are prescribed for both options, including challan generation, modes of payment, accounting treatment, and maintenance of records.

The circular also prescribes maintenance of a register by DDOs to track TDS deductions and emphasizes timely filing of returns to ensure credit of TDS to the deductee. The guidelines are intended to standardize procedures, simplify compliance, and ensure proper accounting and reporting of GST–TDS by Government authorities.