Introduction: “Payment Aaya… Par Poora Nahi Aaya”
Rohit runs a small electrical supply business in Govind Nagar, Kanpur.
After months of effort, he finally secured a government order through GeM.
Delivery done. Invoice submitted. Everything perfect.
After 25 days, payment arrived.
He checked his bank account.
“₹9,74,000… par invoice toh ₹10,00,000 ka tha…”
Confused, he immediately called an Expert from Team Rokadh.
“Sir payment kam kyun aaya?”
The expert calmly replied:
“Rohit ji, aapka paisa kata nahi hai… adjust hua hai.”
Rohit paused.
“Matlab?”
“GST TDS, Income Tax TDS, aur GeM ka TCS deduct hua hai.”
That day, Rohit realized:
👉 Government business mein sirf supply karna kaafi nahi hota
👉 System samajhna zaroori hota hai
Section 1: Government Supply Business – Ground Reality
Let’s simplify.
Government supply means:
👉 Supplying goods/services to:
- Central/State Government
- PSUs
- Municipal bodies
- Government institutions
Real Story: Lucknow Trader
Imran from Lucknow started selling office furniture locally.
One day, someone told him:
“GeM pe aa jao… government buyer milenge.”
He hesitated.
Documentation, GST, portal… sab complicated lag raha tha.
But with guidance from Team Rokadh, he registered.
First order: ₹1.8 lakh
Second order: ₹6.5 lakh
Within 1 year → ₹45 lakh turnover
👉 Lesson: Government market bada hai, par structured hai
Section 2: GST in Government Supply – No Confusion Zone
Basic Rule (Very Important)
👉 GST applies on almost all supplies to government (unless specifically exempt)
Story: Delhi Supplier Mistake
A Delhi-based supplier quoted ₹5 lakh for goods.
He forgot to mention GST separately.
After delivery:
- He had to pay GST from his own pocket
👉 Lesson:
✔ Always quote: “Price + GST extra”
✔ Or clearly mention “inclusive of GST”
GST Rates (Correct Understanding)
- Goods → As per HSN (5%, 12%, 18%, etc.)
- Services → Usually 18%
Practical Tip
👉 Wrong GST quoting = direct profit loss
Section 3: GST TDS by Government (Section 51)
When it Applies
If:
👉 Contract value exceeds ₹2.5 lakh
Then:
👉 Government deducts 2% GST TDS
(1% CGST + 1% SGST OR 2% IGST)
Story: Mumbai Contractor
A contractor in Mumbai completed a ₹20 lakh project.
Payment received: ₹19.6 lakh
He panicked.
Called Expert from Team Rokadh.
Expert explained:
“Sir, yeh aapka nuksaan nahi hai.”
“Yeh GST TDS hai jo government ne aapke naam pe deposit kiya hai.”
Important
✔ Visible in GST portal (Electronic Cash Ledger)
✔ Can be used to pay GST liability
👉 Lesson: TDS is not loss—it’s prepaid tax
Section 4: Income Tax TDS – Why Money Gets Deducted
Story Continues: Rohit from Kanpur
Rohit asked:
“Sir GST samajh aaya… par aur deduction kyun?”
Expert replied:
“Income Tax TDS bhi kata hai.”
Common Sections
- Section 194C → Contracts (1% / 2%)
- Section 194J → Professional services (10%)
Important Truth
👉 This TDS is NOT expense
✔ It appears in Form 26AS
✔ Adjustable in ITR
👉 Lesson: “Deduction ≠ Loss”
Section 5: TCS on GeM Portal (Income Tax Section 206C)
What Happens on GeM
GeM may deduct:
👉 TCS (Tax Collected at Source)
Story: Lucknow Seller
Imran saw 3 deductions:
- GST TDS
- Income Tax TDS
- TCS
He got worried.
Expert from Team Rokadh explained:
“Sir ye sab final tax nahi hai… adjustment hai.”
Reality
✔ TCS reflects in 26AS
✔ Can be claimed in ITR
👉 Lesson: Government business mein deductions normal hai
Section 6: GeM Portal – The Real Game Changer
What is GeM?
👉 Government e-Marketplace for procurement
Story: Delhi Startup
A Delhi-based startup listed cleaning products on GeM.
Initially no orders.
They improved:
- Product listing
- Pricing
- Documentation
Within 3 months:
👉 Bulk orders from departments
Key Benefits
✔ Direct access to government buyers
✔ Transparent bidding
✔ Nationwide reach
👉 Lesson: GeM is opportunity—but requires discipline
Section 7: OEM – The Deal Breaker
What is OEM?
👉 Original Equipment Manufacturer authorization
Story: Mumbai Supplier
A trader participated in a tender.
Lowest price.
Still rejected.
Reason:
👉 No OEM authorization
Reality
Many tenders require:
✔ OEM certificate
✔ Authorization letter
👉 Lesson: Documentation > Pricing
Section 8: Pricing Strategy – Where Profit is Made or Lost
Story: Kanpur Supplier Mistake
Rohit quoted lowest price.
Ignored:
- GST
- TDS
- Transport cost
Result
👉 Payment received → Profit gone
Correct Strategy
✔ Add GST properly
✔ Consider deductions
✔ Maintain margin
👉 Lesson: “Lowest price ≠ Best deal”
Section 9: Cash Flow – Biggest Hidden Challenge
Story: Lucknow Contractor
Completed work.
Payment delayed 45 days.
Meanwhile:
- GST payable
- Labour payment pending
Reality
Government payments take time.
Solution
✔ Maintain working capital
✔ Plan tax payments
👉 Lesson: Cash flow planning is survival tool
Section 10: Case Studies (City-Based Real Insights)
Delhi Case
Supplier missed compliance → Tender rejected
Mumbai Case
Underpricing → Loss
Kanpur Case
GST mistake → Profit reduced
Lucknow Case
GeM understanding → Business growth
MSME Case
Registered on GeM → Expanded nationally
Section 11: Compliance Checklist
✔ GST registration
✔ Proper invoicing
✔ TDS tracking
✔ GeM compliance
✔ Income tax filing
Section 12: Common Mistakes
❌ Ignoring GST
❌ Not checking deductions
❌ No OEM
❌ Wrong pricing
❌ No planning
Section 13: Profitability Insight
Government business is:
✔ Stable
✔ Scalable
But only if:
👉 You understand system
Section 14: FAQs (Practical & Real)
GST
Is GST applicable?
👉 Yes
TDS
Why deducted?
👉 Legal compliance
GeM
Is it useful?
👉 Very
OEM
Required?
👉 Often
City Queries
Government supply Delhi?
Same rules
Kanpur GeM?
Same process
Lucknow tender?
Same system
Mumbai supply?
Same framework
Section 15: Final Thought
Government business is not complicated.
👉 It is disciplined
Final Conclusion
If you understand:
- GST
- TDS
- GeM
- Pricing
👉 You can scale your business massively
About Rokadh Financial Services Private Limited
We help businesses with:
✔ GST
✔ Income Tax
✔ GeM registration
✔ Compliance
