GSTR-7 is an important return for all taxpayers who deduct tax at source (TDS). With this, the government ensures that the tax payment is accurately reported and paid by the taxpayer. As per the latest updates, you must file GSTR-7 every month even if the taxpayer has not made any deductions that month. Since it is now an important return for all TDS deductors, you must understand everything about GSTR-7.
This blog will discuss GSTR-7 in detail including its key components, who files it, due date, related penalties, and more.
What is GSTR-7 Return?
GSTR-7 is a monthly return that must be filed by individuals or entities who deduct tax at source (TDS) under the GST system in India. This form includes details about the TDS deducted, the amount payable, the amount paid, and any TDS refunds claimed by you. Filing this return ensures that the deducted tax is accurately reported and credited to the government, helping businesses comply with GST regulations.
Who Needs to File GSTR-7?
We have already stated that every taxpayer who deducts TDS have to file GSTR-7 every month. So, GSTR-7 mandate applies to all entities who deduct TDS which are as follows:
- Government departments and establishments.
- Local authorities.
- Governmental agencies set up by the government.
- Persons or entities notified by the Central or State Government on the recommendations of the GST Council. This includes:
- Authorities, boards, or bodies set up by Parliament, State Legislature, or government with at least 51% government ownership.
- Societies established by the Central or State Government or local authorities and registered under the Societies Registration Act, 1860.
- Public sector undertakings (PSUs)
Note: Only businesses/entities with taxable supply under a contract exceeding ₹2.5 lakh can deduct TDS.
Due Date to File GSTR-7
The due date for filing GSTR-7 is on or before the 10th of the subsequent month. For example, if you are filing GSTR-7 for March 2025, then you need to file it on or before the 10th of April 2025.
Prerequisites for Filing GSTR-7 Form
Here are prerequisites for you as a tax deductor before you file GSTR-7:
- Register as a TDS deductor under GST and have a valid GSTIN.
- Have a valid user ID and password.
- Have a valid and active digital signature (DSC) for cases when filing is done through DSC.
- You have already credited the amount to your suppliers.
Do You Need to File GSTR-7 in Case of No TDS Payments?
Yes. As per the notification no. 17/2024, GSTR-7 shall follow sequential filing, effective November 1, 2024. That means that if you don’t file GSTR-7 for any month, you won’t be able to file it the following month. So, even if you don’t have any TDS payments in a month, you still need to file a Nil GSTR-7 for that month. If you don’t, you will not be able to file GSTR-7 the following month even if you have TDS payments. This rule applies to everyone who is liable to deduct TDS.
Penalty in Case of Failure or Late Filing of GSTR-7
Failure to file GSTR-7 on time can lead to following penalties or consequences:
- Penalty Amount: In case of late filing of GSTR-7, you can incur penalties of as much as INR 200 per day (100 for CGST and 100 for SGST), capped at the maximum penalty of INR 5000.
- Interest: You will also be paying 18% interest p.a. on TDS amounts you have missed paying for a certain period.
- No Penalty for Nil Return: As of 22nd June 2024, the government had announced no late fee will be applicable for Nil GSTR-7 return. However, this does not mean that you won’t face penalties when filing regular GSTR-7 beyond the due date. Moreover, it also does not mean that you can miss filing nil GSTR-7 because it is mandatory.
GSTR-7 Format
Sections in GSTR-7 Format
In GSTR-7, the person who has registered as a TDS deductor needs to furnish all the information about his business and transactions. So, here is a detailed view of all the columns in GSTR-7:
- GSTIN: This column gets auto populated with a unique identification number (GSTIN) provided by GST authorities.
- (A) Legal Name of the registered taxpayer: This column will also get auto-populated based on the GSTIN.
(B) Trade Name: In this column, the taxpayer needs to mention the trade name. You should know that the legal name and trade name can be different.
(C) Acknowledgement Reference Number: ARN a 15-digit identifier number assigned to every business after they submit their GST registration application. It also gets auto-populated after filing.
(D) Date of ARN: It is the date of generation of ARN. - Details of Tax Deducted at Source: The TDS deductor needs to record all the transactions that involve tax deduction at sources. They also need to note the total amount paid to deductees. Based on the above information, you will calculate IGST, CGST and SGST.
- Amendment in Details of Earlier Filed GSTR-7: Through this column, a taxpayer can easily modify or amend the earlier-filed GSTR-7.
- Tax deduction at Source and Tax Paid: In this section, the TDS deductor needs to furnish the tax payment details that he or she has deducted and paid for the selected tax period.
- Refund Claimed: This section of GSTR-7 contains details regarding the refund claimed by the TDS deductor from the e-cash ledger.
- Interest and Late Fees, Payable and Paid: This section will also consist of details regarding interest and late fees payable or paid.
At the end of GSTR-7, the TDS deductor needs to verify it using a digital signature certificate (DSC). But, before verifying the GSTR-7, he or she should validate the details entered. If you file a GST return form once, you cannot amend or rectify it.
Conclusion
GSTR-7 is hence very important as a part of your GST return filing. In case you miss filing it for a single month, you won’t just face penalties but also not be able to file it for the next month. Even if you do not have any TDS payments in a month, you need to file a Nil return. Hence, it is important that you remember to file your payments of TDS in GSTR-7 return before 10th of every subsequent month.
