Mr. Bholuram, a supplier located in Meerut, U.P. supplied the bedsheets, pillow covers and blankets to a Governmental agency, registered in U.P.…

(a) As per section 51 of the CGST Act, 2017, it is mandatory for the following persons to deduct tax at source from payments made to the suppliers of taxable goods and/or services:- (a) Central/State Government department or establishment; (b) local authority; or (c) Governmental agencies; or (d) such notified persons The tax would be deducted @ 1% (each under CGST and SGST) of the payment made to the supplier of taxable goods and/or services, where the total value of such supply, under a contract, exceeds - 2,50,000 (excluding the amount of Central tax, State tax, Union Territory tax, Integrated tax and cess indicated in the invoice). Thus, individual supplies may be less than - 2,50,000/-, but if total value of supplies under a contract is more than - 2,50,000/-, TDS has to be deducted. In the given case, Mr. Bholuram has made supplies to a Governmental agency and total value of supply under a contract exceeds - 2,50,000, it is mandatory for Governmental agency to deduct TDS @1% each under CGST and SGST on the net value of taxable supplies. The amount of TDS required to be deducted each under CGST & SGST each is 4,610.