How to file GSTR-7 for Components of a Valid TDS Return on GST Portal?

What is GSTR-7?

GSTR-7 is a return form filed by government departments or local authorities for tax deducted at source (TDS) under the GST system. It is mandatory for any organization or person deducting tax on behalf of the government to file this form.

The filing ensures that the TDS amounts are reported and paid to the government, allowing transparency in tax collection. The form also enables the government to track the TDS deductions and ensure proper credit for the taxpayers.

Who is required to file GSTR 7?

GSTR-7 is a return filed by entities required to deduct Tax at Source (TDS) under GST. These include:

• Government departments or agencies
• Local authorities
• Entities specified by central/state governments based on GST Council recommendations
• Certain public sector undertakings and government-established societies or bodies with significant government equity

Entities must deduct TDS at 2% (CGST 1% + SGST 1% for intrastate supplies or 2% IGST for interstate supplies) on payments exceeding ₹2.5 lakhs. However, TDS is not deducted when the supplier’s location and place of supply differ from the recipient’s registration state.

Features of GSTR-7 Form

Below are the features of the GSTR-7 form -

• Registered taxpayers must deduct TDS when making payments to suppliers and deposit it with the government.
• TDS is not deducted if the supplier’s location and place of supply differ from the recipient’s registration state.
• GSTR-7 must be filed monthly by the 10th for the previous tax period.
• It is only applicable to specific taxpayers and includes details of TDS deducted.
• Filing requires full payment of previous tax liabilities.
• The form’s details are reflected in Part C of GSTR-2A for suppliers.
• GSTR-7A serves as a TDS certificate for deductees.
• All amounts are reported in INR.

Who are required to deduct TDS under GST?

As per GST law following people or entities are required to deduct TDS :

• A department or establishment of the Central or State Government
• Local authority
• Government agencies
• Persons or categories of persons as may be notified by the Central or a State Government on the recommendations of the Council.

The following entities also need to deduct TDS as per Notification No. 33/2017 – Central Tax, 15th September 2017

• An authority or a board or any other body which has been set up by Parliament or a State Legislature or by a government, with 51% equity owned by the government
• A society established by the Central or any State Government or a Local Authority and the society is registered under the Societies Registration Act, 1860
• Public sector undertakings

Due date of filing GSTR 7

The due date for filing GSTR-7 is the 10th of the month following the month in which TDS was deducted. For example, if TDS is deducted in January, the GSTR-7 for that month should be filed by February 10th. Following are the due dates for filing GSTR-7 -

Pre-conditions for Filing GSTR-7

To file GSTR-7, the tax deductor must meet the following conditions:

• Be registered as a tax deductor with a valid GSTIN
• Have a valid User ID and password
• Possess an active and non-expired digital signature (if filing through DSC)
• Ensure payment or credit of the deducted amount to the supplier's account.

Importance of GSTR-7

GSTR 7 shows all the details regarding the TDS of a taxpayer. Thus this is a very important GSTR. Some of the major importance are as follows:

• The details regarding TDS deducted, a refund of TDS that can be claimed, TDS payable, TDS to be paid is stated in this GSTR.
• The deductee can claim the input credit of the TDS deducted and can utilize the payment of output tax liability through this GSTR.
• After filing this form, the details will be electronically available in Part C of the form GSTR 2A.
• Even the certificate for such TDS deducted can be received after filing GSTR 7.

Details to be provided in GSTR-7

GSTR 7 has a total of 8 sections in it.

Following are the details to be provided in the GSTR-7 form:

• GSTIN:
  Each taxpayer has been allotted with a state-wise PAN-based 15-digit Goods and Services Tax Identification Number (GSTIN). This GSTIN will be auto-populated at the time of filing the return.
• The legal name of the Deductor:
  As soon as the taxpayer will log in to the GST portal, the name of the taxpayer will be auto-populated. Also, any trade name of the registered person will also get auto-populated.
• Details of TDS:
  Here individual needs to furnish all the details related to the TDS deducted such as GSTIN of the deductee, total amount and TDS amount (CGST or SGST or IGST)
• Amendments to details of TDS in respect of any earlier tax period:
  Any rectification required in the data that was submitted in the return of previous months can be done here. This can be done by filling the original and revised details in this section. The TDS certificate that is Form GSTR-7A, will get revised with the help of these amendments.
• TDS paid:
  Here you need to fill the details of the TDS deducted from the deductee and the tax amount paid to the government.
• Interest, Late Fees payable and paid:
  If in any case there are any interest fees or late fees applicable on the TDS amount of the taxpayer, the details must be mentioned here. This includes the details of such interest and late fees payable as well as the amount paid till date.
• Refund claimed from electronic cash ledger:
  If the taxpayer claims the refund of TDS from the electronic cash ledger, the details of the same must be mentioned in this section. The bank details should also be provided where the refund for TDS has to be credited.
• Debit entries in electronic cash ledger for TDS or interest payment:
  The details in this section are auto-populated, as soon as the taxpayer finishes filing the returns and the payment of TDS along with interest if any is paid.

Penalty for not filing GSTR 7 on time

If you fail to file your GSTR-7 by the due date, the following late fees apply:

• Rs. 100 per day under the Central Goods and Services Tax (CGST).
• Rs. 100 per day under the State Goods and Services Tax (SGST), totaling Rs. 200 per day.

The maximum late fee for delayed filing is capped at Rs. 5,000.

The late fee will accrue daily from the due date until the actual filing date.

In addition to the late fee, an 18% per annum interest charge will be levied on the outstanding TDS amount.

Revision of GSTR-7

When once GSTR 7 is filed it cannot be revised. If any mistake is made in the return, it has to be corrected in the next month’s return.

For instance, if a mistake is made in the GSTR 7 of the month of September, the rectification for the same can be made in GSTR 7 of October or in later months when the error or mistake is identified.

For every taxpayer who pays TDS or whose TDS is deducted, the form GSTR 7 is very important. GSTR 7 is essential as it contains all the major details of TDS deducted, TDS paid, or payable. After filing GSTR 7, it becomes easy for the taxpayer to claim their TDS.

Filing GSTR-7 or any other GST return can be challenging, especially for those new to the process. To ensure accuracy and avoid mistakes, it's advisable to consult professionals. Tax2win’s experts are ready to help with GST filing and answer all your GST questions. Book a tax expert today!