Tax deduction at source requires notified government entities to withhold tax from supplier payments exceeding a specified threshold. Mandatory tax deduction at source allows Central or State Governments to notify specified government entities and persons to deduct tax from payments to suppliers of taxable goods or services where contract value exceeds a notified threshold; deduction excludes tax on the invoice. Deductors must remit withheld amounts to the appropriate government within a prescribed period, issue prescribed certificates to deductees, and face a capped daily fee for failure to furnish certificates and interest for failure to deposit withheld tax. Deductees claim credit in their electronic cash ledger as reflected in the deductor's return; refunds for excess or erroneous deductions follow the statutory refund procedure.