https://help.tallysolutions.com/docs/te9rel64/Tax_India/gst/tds_tcs_on_gst.htm

Account for TDS or TCS on Purchases Under GST

Record a purchase voucher with GST for the complete transaction, and then deduct TDS in journal voucher. Make the payment for the balance amount. These transactions will not appear in GST returns.

Consider a scenario where Ajay Developers records sale of works contract to KM Council of India, worth Rs. 1,00,000. The transaction attracts 18% GST.

Sales voucher

Purchase voucher

Journal voucher

Payment voucher

Receipt by accounting for TDS deduction

To record a sales voucher in the books of Ajay Developers

Debit: KM Council of India = 1,18,000

Credit: Sale of works contract = 1,00,000

Credit: CGST @ 9% = 9,000

Credit: SGST @ 9% = 9,000

To record a purchase voucher in the books of KM Council of India

Debit: Purchases of works contract = 1,00,000

Debit: CGST @ 9% = 9,000

Debit: SGST @ 9% = 9,000

Credit: Ajay Developers = 1,18,000

KM Council of India will deduct TDS and then make the payment to Ajay Developers.

To record a journal voucher for TDS deduction in the books of KM Council of India

Debit: Ajay Developers = 2,000

Credit: TDS - CGST @ 1% = 1,000

Credit: TDS - SGST @ 1% = 1,000

To record a payment voucher for TDS deduction in the books of KM Council of India

Debit: Ajay Developers = 1,16,000

Credit: Bank/Cash = 1,16,000

Ajay Developers will record a receipt voucher and account for TDS deduction.

To record a receipt voucher in the books of Ajay Developers

Debit: Cash/Bank = 1,16,000

Credit: KM Council of India = 1,16,000

To record TDS on CGST and SGST in the books of Ajay Developers

Debit: TDS - CGST = 1,000

Debit: TDS - SGST = 1,000

Credit: KM Council of India = 2,000

Use the same process to record transactions of TCS with GST.