Basics of GSTR-7

GSTR-7 is a monthly return filed by individuals who deduct tax at source or TDS under the Goods and Services Tax (GST). Every GST registered individual who deducts TDS under GST must file in Form GSTR-7 by the 10th of next month. 

The details in GSTR 7 include the amount of TDS deducted, the TDS paid and payable, and the TDS refund claimed if any.

The purpose of GSTR-7 is to provide information regarding all TDS deductions made by the deductor entity during the tax period. It captures granular, supplier-wise details of payments on which tax was deducted, the actual amounts that were deducted, and the taxes that were deposited with the government. Any amendments or corrections to past reported deductions can also be updated in GSTR-7.

Who should file GSTR-7

You must be a registered taxpayer under the GST with a 15 digit PAN based GSTIN. The aggregate turnover of your business should be greater than 20 lakh rupees.

As per the GST law, the following entities need to deduct TDS, and thus will be required to carry out GSTR-7 return filing under GST:

• A department or establishment of the Central of the State government

• Local Authority

• Governmental agencies

• Persons or category of persons as may be notified on the recommendations of the GST Council

• 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 Government

• Society established by the Central or any State government or a Local Authority, which is registered under the Societies Registration Act

• Public Sector undertakings

Regulatory guidelines for GSTR-7

Liability Criteria:

GSTR-7 is mandated to be filed if the registered person crosses the prescribed limit of the annual turnover threshold. For private entities, this limit is ₹50 lakhs, while for specified banking and financial institutions, it is ₹50 crores in annual turnover.

Monthly Reporting Requirement:

Unlike most other GST returns, which are filed quarterly, GSTR-7 has to be submitted every month by the deductor. The purpose is to capture TDS details early for the timely reconciliation of input tax credits by concerned suppliers.

Filing Nil Return:

Even in cases where no tax deductions have been made during the particular tax period or month, the qualifying diductors have to submit a ‘Nil’ GSTR-7 adhering to the given timeline. Non-filing attracts the consequence of late fees.

Reconciliation:

The tax deduction amounts reported by deductor entities in their respective GSTR-7 have to match the TDS credit claimed by corresponding suppliers in their returns for smooth processing. Any discrepancies lead to dunning notices for reconciliation being issued.