GST Rule: Government Must Deduct 2% TDS on Payments Over Rs. 2.5 Lakhs; Register and Report in GSTR-7

Under the GST framework, government entities and notified organizations must deduct TDS at 2% (1% CGST + 1% SGST) on contractual payments exceeding Rs. 2.5 Lakhs to suppliers. The deducted TDS is to be deposited into the GST account and will appear in the supplier's electronic cash ledger, aiding in tax liability settlements. TDS deductors must register with GST, deposit the TDS into the government account, and report it in GSTR-7 Returns. They must also issue a TDS certificate to the supplier within five days of the deposit.