What is GSTR-7?
GSTR-7 is a monthly return filed by individuals who deduct tax at source. Every GST-registered individual who deducts TDS under GST must file Form GSTR-7 by the 10th of next month. The form contains details of TDS deducted, TDS payable, TDS refund, etc.
GSTR-7 is a return filed by the individual who deducts TDS under GST. GSTR-7 contains details of the TDS deducted, TDS liability payable and paid, TDS refund claimed, etc.
Who can deduct TDS under GST?
As per the GST law, the following individuals/entities can deduct TDS :
- A department or establishment of the Central or state government
- A local authority
- Governmental agencies
- Persons or categories of persons as may be notified by the Central or a state government on the Council’s recommendations
As per the Notification No. 33/2017 – Central Tax, 15th September 2017, the following entities can also deduct TDS:
- An authority, a board, or any other body set up by the Parliament, a State Legislature, or by a government with 51% equity (control) owned by the government
- A society established by the Central or any state government or a local authority and the society registered under the Societies Registration Act, 1860
- Public sector undertakings
The above deductors must deduct TDS where the total value of supply under the contract exceeds Rs.2.5 lakh. The rate for TDS is 2% (CGST 1% + SGST 1%) in case of intrastate supply and 2% (IGST) in case of interstate supplies. However, TDS will not be deducted when the location of the supplier and place of supply is different from the registration place (state) of the recipient.
Importance of GSTR-7
Transparency and Compliance:
GSTR-7 ensures transparency in TDS deduction and helps in the compliance of tax regulations by the deductors.
Input Tax Credit (ITC) Matching:
The details of TDS reported in GSTR-7 by the deductor are matched with the GSTR-1 and GSTR-2A of the deductee. This helps in a seamless ITC claim for the deductee.
Tracking TDS Deductions:
GSTR-7 allows the deductees to track the TDS deducted by the deductors against their GSTIN.
Streamlining Tax Collection:
TDS deduction under GST streamlines the tax collection process and helps prevent tax evasion.
Read more: Details required in GSTR-7 for Tax Deducted at Source (TDS)
Terms Used in GSTR-7 Form
Deductor:
The person or entity responsible for deducting TDS under GST.
Deductee:
The supplier of goods or services from whom TDS is deducted.
TDS Certificate:
The deductor issues a TDS certificate (Form GSTR-7A) to the deductee as proof of TDS deduction.
Due date of GSTR-7
The filing of GSTR-7 for a month is due on the 10th of the following month.
For instance, the due date of filing GSTR-7 for October is 10th November.
The details required in GSTR-7
Provide GSTIN:
Each taxpayer will be allotted a state-wise PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN). GSTIN of the taxpayer will be auto-populated at the time of return filing.
The legal name of the deductor
The taxpayer’s name will be auto-populated when logging into the common GST portal. Also, if there is any registered person’s trade name, it will get auto-populated.
Details of the tax deducted at source:
Here, you need to mention the details of the TDS deducted, such as GSTIN of the deductee, total amount and TDS amount (central/state/integrated).
Changes to details of TDS for any earlier tax period:
Any correction to the data submitted in the return of previous months can be done here by filling in the original and revised details. Based on this amendment, the TDS certificate (GSTR-7A) will be revised.
Tax deduction at source and paid:
Here, you need to mention the tax (integrated/central/state) amount deducted from the deductee and the tax (integrated/central/state) amount paid to the government.
Interest, late fee payable, and paid:
If there is any interest or late fees applicable on the TDS amount, you must mention the details of such interest and late fees payable along with the amount paid to date.
Refund claimed from electronic cash ledger:
If you want to claim the refund of TDS from your electronic cash ledger, you must mention such details in this section. You should also provide your bank details where the refund for TDS should be credited.
Debit entries in the electronic cash ledger for TDS/interest payment [to be populated after payment of tax and submissions of return]:
The entries in the section are auto-populated once you finish filling the return and the payment of TDS along with interest if any.
Once all the particulars are furnished correctly, the taxpayer must sign a declaration regarding the correctness of the information. The deductor can authenticate the return either through a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
What is the Penalty for Non-Filing of GSTR-7?
Non-filing or delayed filing of GSTR-7 can attract penalties and interest charges.
The penalty for late filing is Rs. 100 per day for each Act (CGST and SGST), subject to a maximum of Rs. 5,000. This penalty is applicable in the case of non-filing, as well as when there are discrepancies in the filed return that are not rectified within the due date.
The Bottom Line
GSTR-7 is an essential compliance requirement for e-commerce operators in India. It involves the reporting of supplies, TCS, and reconciliation with other GST returns. By understanding the bottom line of GSTR-8 and adhering to its filing requirements, e-commerce operators can contribute to the efficient functioning of the GST system while avoiding penalties and legal issues.
Also Read: Applicability and registration requirements for GSTR-7
Also Listen: GSTR 7 in GST: Essential Compliance for TDS Deductibles
Frequently Asked Questions:
Who is liable for GSTR 7?
Form GSTR-7 is a return which is required to be filed by the persons who deduct tax at the time of making/crediting payment to suppliers towards the inward supplies received.
What is the last date for filing GSTR-7?
The last date for filing GSTR-7 is the 10th of the month following the month in which the TDS has been deducted. It is a monthly return, and timely filing is essential to avoid penalties and interest charges.
What is the turnover limit for GSTR-7?
There is no turnover limit for GSTR-7 filing. The requirement to file GSTR-7 arises when specified persons, such as government departments, agencies, and local authorities, deduct TDS under GST while making payments to registered suppliers, irrespective of their turnover.
