Understanding GSTR-7: Requirements, Filing Dates, and Penalties for Tax Deductors
GSTR-7 is a crucial monthly GST return for entities deducting Tax Deducted at Source (TDS), detailing TDS amounts, liabilities, and refunds. It must be filed by the 10th of the following month, with penalties for late submission including daily fees and interest. The form, which cannot be directly revised, allows amendments in subsequent filings and requires specific information across eight sections, including GSTIN details and tax payment particulars. Recent updates include a mandate for invoice-wise reporting and potential monthly filing even with no deductions.
GSTR-7 is a required monthly filing for entities that deduct Tax Deducted at Source (TDS) under the Goods and Services Tax (GST) framework. All GST-registered entities responsible for TDS deductions must submit Form GSTR-7 by the tenth day of the subsequent month. This form includes comprehensive details regarding TDS amounts deducted, payable liabilities, and any claims for TDS refunds.
Latest Updates on GSTR-7 Filing Several important updates have been introduced regarding GSTR-7 filing:
- On June 7, 2025, the GSTN, through an advisory, implemented a restriction preventing taxpayers from filing their GSTR-3B after three years from its due date. This change will take effect on the GST portal starting from the July 2025 tax period.
- As of May 6, 2025, the CBIC has mandated invoice-wise reporting in GSTR-7, applicable from May 1, 2025 (i.e., for the return period of April 2025 onwards). The GSTN is expected to implement this on the portal soon, aligning with CGST notification No. 09/2025, dated February 11, 2025, which brought into effect clause 37 of CGST Notification 12/2024, amending the CGST Rules.
- On July 23, 2024, the Union Budget 2024 proposed an amendment to Section 39. This amendment seeks to make it mandatory for TDS deductors to file returns every month, even if no deductions were made during that month. It also aims to include an enabling clause for prescribing the time limit for filing such returns. This will become effective once notified by the CBIC.
- During the 53rd GST Council meeting on June 22, 2024, it was recommended that all eligible taxpayers file GSTR-7 monthly, regardless of whether any tax was deducted. The Council also suggested waiving late fees for delayed GSTR-7 filings and requiring invoice-wise details in the form. These changes will be implemented once notified by the CBIC.
What is GSTR-7?
GSTR-7 is a monthly declaration form submitted by entities that deduct TDS under the GST regime. This form contains specific information on the TDS deducted, the TDS liability that is due and paid, and any refunds claimed for TDS.
Who Can Deduct TDS Under GST?
Under GST regulations, specific government bodies and entities are authorized to deduct TDS. These include departments or establishments of central or state governments, local authorities, and governmental agencies. Additionally, the Central or State government may designate other persons or categories of persons based on the Council's recommendations.
According to Notification No. 33/2017 – Central Tax, dated September 15, 2017, the following entities are also empowered to deduct TDS:
- An authority, a board, or any other body established by the Parliament, a State Legislature, or by a government with at least 51% equity or control owned by the government.
- A society established by the Central or any state government or a local authority, and registered under the Societies Registration Act, 1860.
- Public sector undertakings.
These deductors are required to deduct TDS if the total contract value for a supply exceeds Rs. 2.5 lakh. The TDS rate is 2% (1% CGST + 1% SGST) for intrastate supplies and 2% (IGST) for interstate supplies. However, TDS is not applicable if the supplier's location and the place of supply differ from the recipient's registration state.
Why is GSTR-7 Important?
GSTR-7 serves as a crucial document, providing a summary of TDS deductions, the amounts of TDS paid and outstanding, and any TDS refunds sought. The deductee, who is the recipient of the supply from whom TDS has been deducted, can leverage this TDS amount as Input Tax Credit (ITC) to offset their output tax obligations.
The details of TDS collected are electronically made available to each deductee in Part C of Form GSTR-2A once the GSTR-7 filing deadline has passed. Furthermore, the TDS certificate, known as Form GSTR-7A, is generated based on the information provided in the filed GSTR-7.
GSTR-7 Due Date
The deadline for filing GSTR-7 is the 10th day of the month immediately following the tax period to which the return pertains. For instance, the GSTR-7 for July is due by August 10th.
What is the Penalty for Not Filing GSTR-7?
Failure to submit the GST return within the stipulated timeframe incurs a penalty. A late fee of Rs. 100 each for CGST and SGST, totaling Rs. 200 per day, is imposed. Nevertheless, the cumulative late fee is capped at Rs. 5,000. It is important to note that no late fee applies to IGST for delayed filings.
In addition to late fees, interest is charged at an annual rate of 18%. This interest is calculated on the TDS amount due, beginning from the day after the filing due date until the actual payment date.
How to Amend GSTR-7?
A GSTR-7 form, once submitted, cannot be directly revised. Any errors or omissions identified in a previous month's GSTR-7 can be corrected in the GSTR-7 filing for the subsequent month or any later month when the discrepancy is discovered. For example, a mistake in the October GSTR-7 can be rectified in the November GSTR-7.
What Information is Required in GSTR-7?
The GSTR-7 form comprises eight distinct sections, detailed as follows:
- Provide GSTIN: Each taxpayer is assigned a 15-digit Goods and Services Taxpayer Identification Number (GSTIN), which is based on their PAN and state. When filing the return, the taxpayer's GSTIN is automatically populated.
- Legal name of the deductor: Upon logging into the official GST portal, the taxpayer’s legal name automatically appears. If a registered person also has a trade name, this will likewise be pre-filled.
- Details of the tax deducted at source: This section requires the GSTIN of the deductee, the total amount, and the breakdown of the TDS amount (Central, State, Integrated Tax). From the April 2025 return period onward, these details must be provided on an invoice-wise basis.
- Changes to details of TDS for any earlier tax period: This part allows for corrections to data submitted in previous monthly returns. Original and revised details must be furnished, invoice-wise, starting from the April 2025 return period. Any amendments made here will lead to a revision of the TDS certificate (GSTR-7A).
- Tax deduction at source and paid: Here, you must specify the integrated, central, or state tax amount deducted from the deductee and the corresponding tax amounts remitted to the government.
- Interest, late fee payable, and paid: If any interest or late fees apply to the TDS amount, their details, along with the total amount paid to date, must be entered in this section.
- Refund claimed from electronic cash ledger: This section is used to claim a TDS refund from your electronic cash ledger. You must also provide your bank account information where the TDS refund should be credited.
- Debit entries in electronic cash ledger for TDS/interest payment: These entries are automatically generated in this section once the return is completed, and the TDS payment, including any applicable interest, has been submitted.
After all particulars are accurately provided, the taxpayer must sign a declaration confirming the information's correctness. The deductor can authenticate the return using either a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC).