GSTR-7: What, How and When?

1. What is GSTR-7?

GSTR-7 means, it is a type of GST Return that shall be furnished by those who deduct tax at source (TDS Deductor). In GSTR-7 the taxpayer has to disclose all the TDS-related information such as

1. Amount of TDS deducted
2. TDS liability payable and paid
3. TDS refund claimed and so forth.

2. Who needs to deduct tax at source (TDS) under GST?

Here is the list of entities that shall deduct tax at source under GST:

1. Central or State Government department or establishment, or
2. Agencies of government, or
3. Any Local authority,
4. PSU (Public Sector Undertaking)
5. Society registered under Societies Registration Act, 1860
6. Or any other person as may be notified by the Government on the recommendations of the GST Council.

The above-mentioned deductor will be liable to deduct tax at source when the total supply value exceeds 2.5 Lakhs INR.

However, the tax would not be deducted if the location of the supplier and the place of supply differ from the recipient's place of registration.

3. Why is GSTR-7 important?

As the GSTR-7 provides each and every detail about TDS, this helps the deductee to claim ITC on TDS that can be further used by him/her to set-off the output tax liability. The deductee gets all such details regarding the tax deducted at source in Part-C of GSTR-2A. In addition to this, the deductee also gets certificate against the TDS in Form GSTR-7A furnished on the basis of GSTR-7.

4. What is the due date of GSTR-7?

The due date for filing GSTR 7 is the 10th day of the subsequent month. Let us understand this with an example:

GSTR-7 for the month of June 2019 will be due on 10th July 2019.

5. What is the rate of TDS?

The TDS rate is 2%, however, there are two cases for the same:

If there is a supply within a state (intra-state) then this 2% will be bifurcated into two parts CGST/UTGST 1% and SGST 1%.

In case if the supply is inter-state i.e., between two states then 2% TDS will be deducted under the IGST heading.

6. What are the consequences of late filing of GSTR-7?

If a TDS deductor late files the GSTR-7, in that case, he has to pay the total penalty of 200 INR which will be further divided into two parts 100 INR CGST/UTGST and 100 INR SGST. However, there are no late fees on IGST in the case of late filing of GSTR-7. Moreover, the late filing fees cannot exceed the 5,000 INR mark.

In addition to this, the TDS deductor is liable to pay interest at the rate of 18% per annum that will start from the very next day of the last due date of GSTR-7.

7. Is it possible to revise GSTR-7?

The GSTR-7 cannot be revised once it is furnished. However, the TDS deductor can revise such a mistake at the time of filing the subsequent month GSTR-7 or any other month in which it is notified. Let us understand this with an example:

If there is a mistake in the GSTR-7 of June then such mistake can be amended in the July month GSTR-7 or any other month in which such mistake is ascertained.