Wondering what is GSTR-7? If yes, then you have stumbled upon the right article. The Goods and Services Tax (GST) system introduced in India significantly changed the country's indirect tax structure, aiming to simplify compliance procedures and foster a transparent tax environment.
As part of this comprehensive tax framework, businesses are required to file various GST returns, each serving a specific purpose in the tax administration process. One such return is GSTR-7, explicitly designed for entities responsible for deducting Tax Deducted at Source (TDS) under the GST regime.
This article will cover all the aspects of GSTR-7, from eligibility to rules and format. Before jumping onto the other important aspect of this article, let us first see what is GSTR-7 return.
What Is GSTR 7?
GSTR-7 serves as a crucial document for taxpayers who deduct tax when making payments to suppliers for the inward supplies they receive.
This return is specifically designed to capture and provide comprehensive information on transactions where tax was deducted at the source, including intricate details of the suppliers involved.
By complying with GSTR-7 requirements, taxpayers fulfill their obligation of reporting these deductions accurately under the Goods and Services Tax (GST) system.
When to File GSTR-7?
The most asked question when it comes to GSTR-7 is, what is the GSTR-7 due date? Taxpayers are required to file GSTR-7 for a specific month once that month concludes. It is important to note that the deadline for filing this return is prior to the 10th day of the subsequent month.
For instance, if you are filing GSTR-7 for March 2020, you must ensure it is filed before the 10th of April 2020. Adhering to this timeline is essential to meet the timely submission requirement and comply with the Goods and Services Tax (GST) regulations.
Prerequisites for Filing GSTR-7
To successfully file GSTR-7, you must fulfill the following key requirements:
- You must be a registered taxpayer under the Goods and Services Tax (GST) regime, possessing a 15-digit PAN-based GSTIN (Goods and Services Tax Identification Number).
- Your business's aggregate turnover should exceed 20 lakh rupees. Assessing your turnover to determine whether you meet this threshold is crucial.
- GSTR-7 necessitates capturing the minute details of transactions where you deduct tax on behalf of your vendors and subsequently pay it while providing them with an Input Tax credit (ITC). These deductions and associated payments must be accurately documented.
By ensuring compliance with these prerequisites, you can effectively file your GSTR-7 return, fulfilling your obligations under the GST framework.
How to File GSTR 7
The GSTR-7 format gathers essential information for taxpayers who intend to deduct TDS from their GST returns. This information guides businesses on how to file GSTR 7.
- GSTIN: In this section, you need to provide your unique PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN).
- Deductor's Name: This field should contain the name of the registered taxpayer for your business.
- Return Period: Specify the filing month, year, and period of the GSTR-7.
- TDS Details: Here, you must record the GSTIN of the parties involved in TDS transactions, along with comprehensive information about those transactions (contract details, invoice-level data, dates, payment details, and TDS amounts). Based on this information, the GST payable can be calculated for all three components (IGST, CGST, and SGST). Using Section 4A of the GSTR-7, you can amend or modify previous tax deductions at source.
- Liability Payable and Paid: This section includes the GST you must pay for the current tax period. It also covers any GST already paid by you, including information on any late fees or penalties incurred (if applicable).
- Refund Claimed: This section captures any tax refunds received for the mentioned transactions.
Finally, you need to electronically sign a declaration at the end of the return, ensuring that all information is accurate and error-free.
Who Can Deduct TDS Under GST?
According to the provisions of the GST law, the following individuals or entities have the authority to deduct TDS:
- Central or state government departments or establishments.
- Local authorities.
- Governmental agencies.
- People as notified by the Central or state government based on recommendations from the Council.
Furthermore, as per notification no. 33/2017 - Central Tax, dated 15th September 2017, the following entities are also empowered to deduct TDS:
- Authorities, boards, or other bodies established by the Parliament, State Legislature, or a government with 51% equity (control) owned by the government.
- Societies established by the Central or any state government or a local authority, and societies registered under the Societies Registration Act 1860.
- Public sector undertakings
The deductors mentioned above are required to deduct TDS when the total value of the supply under a contract exceeds Rs. 2.5 lakh. The TDS rate is 2%, comprising 1% CGST and 1% SGST for intrastate supplies and 2% IGST for interstate supplies.
However, TDS will not be deducted if the supplier's location and the place of supply differ from the recipient's registration place (state).
Why Is GSTR-7 important?
GSTR-7 provides a comprehensive overview of the TDS deductions made, the amount of TDS paid and payable, and any TDS refund claimed.
The deductee can claim the TDS as Input Tax Credit (ITC) and utilize it towards their output tax liability. The details of TDS deductions are electronically available to each deductee in PART 'C' of Form GSTR-2A after the deadline for filing Form GSTR-7.
Additionally, the certificate with the TDS deductions can be accessed in Form GSTR-7A, which is generated based on the field GSTR-7 return.
What Are the Details Required in GSTR-7?
GSTR-7 comprises eight sections, which are outlined below:
- Provide GSTIN: Enter your state-specific PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN).
- Deductor's legal name: The name of your taxpayer will automatically appear when you log in.
- Details of tax deducted at source: Provide information about the TDS deducted, including the deductee's GSTIN, total amount, and TDS amount.
- Correction of TDS details for previous tax periods: Rectify any previously submitted data by entering the original and revised details.
- Tax deduction at source and payment: Specify the amount of tax (integrated/central/state) deducted from the deductee and the amount paid to the government.
- Interest and late fees payable and paid: If there are any applicable interest or late fees on the TDS amount, provide the details of the payable amount and the amount paid to date.
- Refund claimed from electronic cash ledger: If you wish to claim a refund of TDS from your electronic cash ledger, provide the necessary details and specify the bank account where the TDS refund should be credited.
- Debit entries in the electronic cash ledger for TDS: Once you have filled in the return and made the TDS payment, this section will automatically populate the entries regarding TDS and interest payments.
After ensuring the accuracy of the provided information, the taxpayer must sign a declaration affirming its correctness.
What Is the Penalty for Non-Filing of GSTR-7?
The penalty for late filing of GSTR 7 is Rs.200 per day, Rs. 100 under CGST and SGST. However, the maximum late fee is at most Rs. 5,000.
GSTR-7 Filling Made Easy With TranZact
GSTR-7 is a return filing form designed for taxpayers who are required to deduct TDS under the GST regime. Taxpayers must comply with the requirements of GSTR-7 and file returns on time.
With TranZact, taxpayers can easily manage the complexities of GSTR-7, ensuring accurate GST reports, compliance, and seamless tax management.
FAQs on GSTR-7
1. What is GSTR-7 applicability?
GSTR-7 applies to taxpayers who want to deduct TDS under the GST system.
2. What is the GSTR-7 form?
GSTR-7 is a form the GST portal provides where taxpayers can enter information regarding TDS deductions, tax payments, and refund claims.
3. What details need to be provided in GSTR-7?
Taxpayers must provide information about TDS deductions, including the deductee's GSTIN, TDS amount, and other related details.
4. Is there a late fee for delayed filing of GSTR-7?
Yes, a late fee of Rs.100 under CGST and Rs.100 under SGST per day is levied for delayed filing of GSTR-7.
5. Can TDS claimed as Input Tax Credit be utilized in GSTR-7?
Yes, the deductor can claim TDS as Input Tax Credit (ITC) and use it to pay their output tax liability in GSTR-7.
6. Is GSTR-7 a monthly return or quarterly?
The GSTR-7 is a monthly return to be filed in Form GSTR-7 by the 10th of the following month.
7. Is GSTR-7 nil return necessary?
No, filing a nil return in GSTR-7 is not mandatory for the tax period wherein you have not made any deductions, while there may be rejected records in that month.
