In the realm of GST return filings, Form GSTR-7 is another important return filing form to be filed by the 10^th of the next month by taxpayers who deduct TDS under GST. The return statement contains complete details TDS deductions, and TDS liabilities paid and payable, when making payments to vendors for goods received.

The GSTR-7 format is designed such that all details pertaining to Tax Deducted at Source (TDS) can effectively be captured, recorded, and reported including details on Input Tax Credits for vendors and adjustments required. It’s important to keep in mind that while GSTR-7 is the return filing form GSTR-7A is the TDS Certificate generated by the system once GSTR-7 return filing is completed.

In this blog, we take a closer look at GSTR-7 and its meaning and purpose. What is the turnover limit, due date for filing, and other pre-requisites for GSTR-7. We’ll also understand the basics on how to file GSTR-7.

What is GSTR-7?

Let’s begin by looking at the meaning of GSTR-7 form. GSTR-7 return filing is a mandatory GST return filing form, required to be submitted by those deducting Tax Deducted at Source or TDS under GST. The statement contains complete details on TDS liabilities paid and payable, and TDS deducted from payments to vendors.

• Purpose: Filed to report TDS deducted to facilitate proper transfer of ITC (Input Tax Credit) to suppliers
• Importance: Accurate TDS reporting for ITC, in turn maintaining trust and reducing scope of tax evasion and fraudulent activities
• GSTR-7 due date: Must be filed and submitted by the 10^th of the month following the month when TDS was deducted (monthly statement)
• GSTR-7 applicability: Any taxpaying entity registered under GST as eligible to deduct TDS must mandatorily file GSTR-7

GSTR-7 applicability

TDS is a specific tax deduction mechanism and only specific entities can deduct TDS under GST. This makes GSTR-7 applicability limited to specific authorised entities only.

• Pre-requisites: Must be a GST registered business with a valid GSTIN number, authorised to deduct TDS.
• GSTR-7 eligibility: In most cases, government entities are required to deduct TDS under GST laws. These may include: local authorities, government departments (State and Central), government agencies, PSUs, societies (those established by the government) or any other as notified.
• TDS deduction threshold: Authorised entities can deduct TDS on the supply of goods when the total value (excluding GST) exceeds ₹2.5 lakhs (i.e., ₹2,50,000). TDS is usually deducted at 2%.

What is the turnover limit for GSTR-7?

There is no turnover limit for GSTR-7 filing. Once a business has been authorised to deduct TDS under GST it must deduct TDS at 2% for all transactions of contract value exceeding ₹2,50,00 (Note: There are some exceptions here).
Accordingly, it must file GSTR-7 to facilitate suppliers from claiming ITC benefits.

Is GSTR-7 NIL return mandatory?

As of now, filing of GSTR-7 on a monthly basis is not mandatory if there have been no TDS deductions made during the given period. However, of the several recommendations at the 53^rd meeting of the GST Council it has been recommended that GSTR-7 be filed on a monthly basis even if there has been no TDS deductions in the month. Moreover, there will be no late fees/penalties for delayed filing.

These recommendations will only come into effect once notified by the CBIC.

Must read: How to File NIL GST Return Online: Step-by-Step Guide (2024)

What is GSTR-7 due date?

The due date for filing GSTR-7 is by the 10^th of the month following the given month in which TDS was deducted. For instance, in May 2024, if TDS was deducted on 2^nd, 8^th, 18^th, 22^nd, 25^th or any other day, details of the same must be filed in GSTR-7 by the 10^th of June 2024.

GSTR-7 late fees and penalties:

There are some late fee charges and penalties involved if GSTR-7 returns are not filed in time. Here’s a snapshot:

• Late fee penalty: ₹100 for each CGST and SGST (i.e., total ₹200). There are no late fees for IGST.
• Maximum late fees: ₹5000 is the upper limit (i.e., late fees cannot exceed ₹5000).
• Interest payable: 18% p.a. interest on the TDS amount will be levied in addition to late fee charges.

How to file GSTR-7 returns on GST portal?

The GSTR-7 format is designed to ensure that all relevant details on Tax Deducted at Source is recorded which makes it easier for suppliers to claim Input Tax Credits.

In the next part, we take a look at the steps to file GSTR-7.

Steps to file GSTR-7

GSTR-7 can be filed online on the GST portal and offline. Here we take a look at the steps involved in filing GSTR-7 online.

Navigate to GSTR-7 form:

• Visit the GST portal and login to your account: //www.gst.gov.in/
• Navigate to the ‘Returns Dashboard’, select filing period, and select GSTR-7 form from the options provided
• Select the ‘Prepare Online’ option to commence the process

Input TDS details (Tax deducted and amendment):

• Add details to Table 3 (i.e., Details of Tax Deducted at Source, including details such as GSTIN of Deductee, Amount, Central/State tax)
• Enter details for Table 4 if applicable (i.e., Amendments to TDS details, which allows you to make changes to TDS details provided in the previous months, provided the supplier has not accepted the said TDS; any change made will again be subject to supplier acceptance/rejection)

Compute TDS liabilities and make payments:

• Click on the ‘Compute liability’ button to calculate amount payable (i.e., including interest)
• View Section 5 and 6 ‘Payment of Tax’ once the computation is completed
• Check cash balance in electronic cash ledger and clear payments (Note: You must have sufficient balance to make payments)
• Click on Preview option to get a preview of GSTR-7 returns

Sign GSTR-7 and submit the form:

• Check the Declaration, select and confirm the message
• Use DSC or EVC signature formats to sign and submit your application
• View acknowledgement message and ARN number for filing GSTR-7

Download GSTR-7:

• Check Section 8 ‘Debit entries in electronic cash ledger for TDS/interest payment’
• Download filed return in PDF or Excel format

Note: Since there are separate TDS deduction rules for same state/ different state, it’s recommended you understand the different GST State code and jurisdiction list for deducting TDS appropriately.

What is the GSTR-7 format?

From the GSTR-7 filing process discussed in the previous section, it’s clear that GSTR-7 form has a specific format. Here’s a snapshot of the GSTR-7 format for your reference (online filing).

• GSTIN and Legal Business name of Deductor: The top section containing details on GSTIN of the deductor (i.e., taxpayer), Legal name of the business, Return period, Status (Filed/Not-filed)
• GSTR-7 TDS details: Sections 3 to 8 with details on Tax Deducted at Source
• Section 3 – Details of Tax Deducted at Source including deductee GSTIN, TDS amount, etc.
• Section 4 – Amendments to TDS Details, i.e., updates/changes/corrections of previous months
• Sections 5 and 6 – Payment of Tax (i.e., TDS deducted and paid, including late fees/penalties and refund details)
• Section 8 – Debit entries in electronic cash ledger for TDS/interest payment
• Declaration or signature via DSC or EVC: Final preview of file, declaration on accuracy of details furnished, digital signature using DSC or EVC (OPT enabled)
• Acknowledgement: Application Reference Number (ARN) generation on successful GSTR-7 filing
• Download filed GSTR-7: Option to download this return in PDF and Excel format

GSTR-7 is an important return filing form that reflects details on Tax Deducted at Source – paid, payable, penalties, and GST refunds. Once GSTR-7 is filed by the taxpayer (deductor), the portal auto generates GSTR-7A certificate, based on which, the supplier (deductee) can claim Input Tax Credits.

It is important to remember that once it is  filed cannot be revised. Any errors or details missed can be amended in the next month’s GSTR-7 filing provided the TDS entries have not been accepted by the supplier.

FAQs

What do you mean by GSTR 7?

GSTR-7 form is a monthly return filing form required to be submitted by the 10^th of the following month by those taxpayers deducting Tax Deducted at Source (TDS) under GST. It contains details on vendor TDS deductions and enables deductees to claim ITC.

Is Gstr 7A mandatory?

GSTR-7A is a TDS certificate that is automatically system generated once a TDS deducting taxpayer files GSTR-7. As such, one does not have to file GSTR-7A.

*This article is for information purpose only. To know more about GSTR-7 filing and TDS deductions, visit the official GST portal website. You may also consult with a GST practitioner, CA or tax consultant for professional advice.

Author: Sohini Banerjee

Sohini is a seasoned content writer with 12 years’ experience in developing marketing and business content across multiple formats. At Tata nexarc, she leverages her skills in crafting curated content on the Indian MSME sector, steel procurement, and logistics. In her personal time, she enjoys reading fiction and being up-to-date on trends in digital marketing and the Indian business ecosystem.