Registering as a Tax Deductor (TDS)

A government office that buys stationery, a public sector undertaking that awards a works contract, and, since October 2024, a manufacturer buying steel scrap from a dealer all share an obligation that has nothing to do with their own sales. Each may have to deduct GST at source from what it pays its suppliers, and each needs a separate registration to do it. The difficulty is that this registration does not look like an ordinary one. It is applied for in a different form, may be held on a TAN instead of a PAN, has a different time limit for grant, and is cancelled by a different order.

This guide covers that procedure. The general steps of an online application (the Part A and Part B structure, OTPs, the TRN and the ARN) are explained in Applying for GST Registration: the Steps Every Applicant Takes. Only what differs for a deductor is set out here.

Who has to deduct

Section 51 of the CGST Act allows the Government to mandate four classes of person, “the deductor”, to deduct tax “at the rate of one per cent. from the payment made or credited to the supplier” of taxable goods or services, where “the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees”. The value is taken without the GST shown on the invoice. The classes are:

• (a) a department or establishment of the Central or a State Government
• (b) a local authority
• © Governmental agencies
• (d) persons or categories of persons notified on the Council’s recommendation

The notified persons are in Notification No. 50/2018-Central Tax, which brought section 51 into force from 1 October 2018. Under clause (d) it lists:

• an authority, board or other body set up by an Act of Parliament or a State Legislature, or established by any Government, “with fifty-one per cent. or more participation by way of equity or control”
• a society established by the Central or a State Government or a local authority under the Societies Registration Act, 1860
• public sector undertakings
• from 10 October 2024, inserted by Notification No. 25/2024-Central Tax, “any registered person receiving supplies of metal scrap falling under Chapters 72 to 81” of the Customs Tariff “from other registered person”

The notification’s provisos take some payments out. Authorities under the Ministry of Defence are excluded except the accounts offices listed in its annexure (Notification No. 57/2018-Central Tax). Supplies from one public sector undertaking to another are excluded (Notification No. 61/2018-Central Tax). Supplies between persons in any of the classes in section 51(1) are excluded, but since 10 October 2024 that exclusion does not extend to the metal-scrap class (Notification No. 73/2018-Central Tax, as substituted by Notification No. 25/2024-Central Tax).

There is also a geographical limit. Under the proviso to section 51(1), no deduction is made where the location of the supplier and the place of supply are in a State or Union territory different from the recipient’s State of registration.

Why the registration is compulsory, and separate

Section 24(vi) requires registration, regardless of turnover, of “persons who are required to deduct tax under section 51, whether or not separately registered under this Act”. The closing words matter most for the newest class. A business buying metal scrap is, by definition, already a registered person. It still needs a registration as a deductor, in addition to the one it holds as a supplier.

PAN or TAN

Section 25(6) makes a PAN a condition of registration. Its proviso makes one exception: “a person required to deduct tax under section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection Account Number”. This is the only class of applicant given that choice. It suits government offices that hold a TAN for income-tax deduction but no PAN of their own. Rule 10(1) of the CGST Rules builds either number into the GSTIN, which contains “ten characters for the Permanent Account Number or the Tax Deduction and Collection Account Number”.

The application: FORM GST REG-07

Rule 12(1) requires the deductor to apply “electronically … in FORM GST REG-07”, signed or verified through EVC, on the common portal. REG-07 is the same form an e-commerce operator uses to register for TCS, with a box to choose “Tax Deductor” or “Tax Collector”.

Rule 12(1A) deals with a deductor that has no office in the State where it must deduct. It names that State in Part A of the form, and in Part B names the State where its principal place of business is, which “may be different”.

The portal’s user manual for tax deductors describes the steps.

1. On the portal, the applicant chooses New Registration and selects “Tax Deductor” in the “I am a” list, and the State or Union territory.
2. In Part A it enters the legal name as it appears against the PAN or TAN, the number itself, and the email address and mobile number of the primary authorised signatory. The name and number are validated against the CBDT database.
3. After OTP verification of the mobile number and email, the portal issues a fifteen-digit Temporary Reference Number. An application not submitted within fifteen days of the TRN is purged.
4. Part B has five tabs: Business Details, Drawing and Disbursing Officer, Authorized Signatory, Office Address of Tax Deductor, and Verification. The constitution chosen on the first tab is checked against the CBDT record.
5. The applicant signs with a DSC or verifies by EVC, and the portal issues an Application Reference Number.

REG-07 also asks for the “Date of liability to deduct/collect tax”, whether the deductor is a Central or State government body, and the latitude and longitude of the principal place of business.

Document checklist

REG-07’s own list says its documents are “not applicable to a department or establishment of the Central Government or State Government or Local Authority or Governmental agencies”. Other deductors, including PSUs, notified bodies and buyers of metal scrap, upload them.

Document	Who provides it	Format and size (portal manual)
Photograph of the Drawing and Disbursing Officer or person responsible for deducting	The deductor	JPEG, under 100 KB
Proof of principal place of business: for owned premises, a property tax receipt, municipal khata copy or electricity bill	The deductor	PDF or JPEG, up to 1 MB
For rented or leased premises, the rent or lease agreement and a document of the lessor’s ownership	The deductor, with the lessor’s document	PDF or JPEG, up to 1 MB
For premises held on consent or shared, a consent letter and a document of the consenter’s ownership	The deductor, with the consenter’s document	PDF or JPEG, up to 1 MB
Where no rent or lease agreement exists, an affidavit to that effect with a document of possession such as an electricity bill	The deductor	PDF or JPEG, up to 1 MB
For premises in a Special Economic Zone, the certificates issued by the Government of India	The deductor	As above

Bank account details are optional in REG-07 (item 12A). The deductor’s own TAN or PAN is entered, not uploaded.

Declarations, consents and signatures

Three statements are prescribed by the form itself.

• The DDO’s details. Item 12 asks for the details of the “DDO (Drawing and Disbursing Officer) / Person responsible for deducting tax/collecting tax”, including PAN and Aadhaar number. On the portal, the DDO can be marked as also the authorised signatory, and the details then carry across.
• Aadhaar consent. Item 14 records consent for the GSTN to obtain details from UIDAI “for the purpose of authentication” of the Aadhaar number given in the form.
• Verification. Item 15 is the solemn affirmation that the information is true, signed by the DDO, the person responsible for deducting, or the authorised signatory.

The form’s instructions add who may sign: the “person who is acting as DDO/ Person deducting/collecting tax can sign the application”. Companies, PSUs, LLPs and foreign companies must sign with a class 2 or higher DSC. Other applicants may also use e-signature or another notified mode. The authorised signatory “shall not be a minor”. Neither the form nor the portal manual lists a separate letter of authorisation among the uploads for a deductor. Authority to sign rests on the designation the form records.

How the application is processed

Rule 12(2) sets the deductor’s own timetable. The proper officer “may grant registration after due verification” and issue the certificate in FORM GST REG-06 “within a period of three working days from the date of submission of the application”. That is shorter than the seven working days under rule 9 for an ordinary application in REG-01.

From 1 November 2025, rule 9A, inserted by Notification No. 18/2025-Central Tax, also applies to “any person who has applied for registration under rule 8 or rule 12”. An application identified on the portal “based on data analysis and risk parameters” is granted registration electronically “within three working days from the date of submission of application”.

The provisions in rule 9 for physical verification before grant, and for the thirty-day period that goes with it, are framed around applications under rule 8. Rule 12 says only that the officer grants registration “after due verification”. Rule 25(1) still allows the officer to have the place of business verified after grant, with the report and photographs uploaded in FORM GST REG-30 within fifteen working days of the visit. CBIC’s Instruction No. 03/2025-GST asks officers to upload GPS-enabled site photographs in that report. The common steps guide explains how physical verification and geotagging work.

What registration leads to

Once registered, the deductor deposits the tax deducted “within ten days after the end of the month in which such deduction is made” (section 51(2)). It files a monthly return in FORM GSTR-7 under rule 66, “on or before the tenth day of the month succeeding the calendar month”. From 1 November 2024, section 39(3) requires that return “for every calendar month whether or not any deductions have been made”. The portal makes the certificate available to the supplier in FORM GSTR-7A, and the supplier claims the amount in its electronic cash ledger. The supplier side is covered in the three electronic ledgers.

The nil-return rule changes how a dormant registration is handled. A deductor that stops deducting still owes a return each month until the registration is cancelled.

Cancellation: FORM GST REG-08

A deductor’s registration is not cancelled through the ordinary cancellation application. Rule 12(3) provides that where the proper officer is satisfied that the person “is no longer liable to deduct tax at source under section 51”, the officer may cancel the registration and communicate it in FORM GST REG-08, following the procedure in rule 22. Since 26 December 2022 (Notification No. 26/2022-Central Tax), the officer may act “on a request made in writing” by the deductor, as well as on an enquiry or in other proceedings. The rule prescribes no form for the request.

REG-08, as substituted by Notification No. 52/2023-Central Tax, has two versions: one following the deductor’s request and one following a show cause notice. Both state that pending returns must be filed, and that cancellation “shall not affect the liability to pay tax and other dues … for any period prior to the date of cancellation”. The ordinary route for other registrations is in Cancelling a Registration on Application.

The forms in sequence

• FORM GST REG-07: application for registration as a tax deductor (rule 12(1))
• FORM GST REG-06: certificate of registration (rule 12(2))
• FORM GST REG-30: field visit report, if the officer orders verification (rule 25)
• FORM GSTR-7: monthly return of deductions (rule 66(1))
• FORM GSTR-7A: certificate of tax deducted, made available to the supplier (rule 66(3))
• FORM GST REG-08: order cancelling the registration (rule 12(3))

The procedure in summary

1. Confirm that the person falls within section 51(1) or Notification No. 50/2018-Central Tax as amended, and that none of the notification’s exclusions applies to the payments in question.
2. Identify each State where deduction is required. Where the deductor has no office in that State, it names that State in Part A of REG-07 and its home State in Part B (rule 12(1A)).
3. Apply in FORM GST REG-07 on a PAN or a TAN, with the DDO’s details, the Aadhaar consent and the verification, signed by DSC, e-signature or EVC as the form permits.
4. Upload proof of the principal place of business and the DDO’s photograph, unless the applicant is a government department, establishment, local authority or Governmental agency.
5. Expect a decision within three working days under rule 12(2), or electronic grant under rule 9A, and a possible field visit under rule 25 after grant.
6. File GSTR-7 by the tenth of every month, including nil months, and deposit deductions within ten days of the month’s end.
7. When the obligation ends, request cancellation in writing, which leads to an order in REG-08 under rule 12(3).

The next guide in this set covers the parallel registration for e-commerce operators that collect tax at source under section 52, made in the same form REG-07.