GSTR-7 is return filed by the taxpayers liable to deduct tax at source under GST. 

Section 51 of Goods and Service Tax Act 2017 states that government may mandate departments, persons or category of persons to deduct tax at source from the payment made or credited to the supplier where the total value of such supplies exceeds Rs. 2.50 Lacs. 

Rule 66 states that every such taxpayers liable to deduct TDS under GST u/s 51 are required to furnish a return in GSTR-7 electronically.

Who is registered person required to deduct tax:

• a department or establishment of the Central Government or State Government
•  local authority
• Governmental agencies
• such persons or category of persons as may be notified by the Government on the recommendations of the Council

Such a person is referred to as the “Deductor”.

Tax deduction:

TDS is to be deducted @ of 1% each for CGST and SGST from the payment made or credited to the supplier(deductee) of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees. In case of IGST, TDS is to be deducted @ 2%. 

However, no deduction is to be made where the location of supplier and State of supply is in a State or Union territory which is different from the State or as the case may be, Union territory of registration of the recipient.

Due Date: The amount deducted as tax shall be paid to the Government by the deductor within ten days after the end of the month in which such deduction is made. Due date to furnish GSTR-7 is 10th of the following month. 

A certificate of tax deduction at source shall be issued and made available electronically to the deductee on the common portal in FORM GSTR-7A on the basis of the GSTR 7 furnished.

Failure to pay TDS

If any deductor fails to pay to the Government the amount deducted as tax, he shall pay interest not exceeding 18 % in addition to the amount of tax deducted.

The determination of the amount in default under this section shall be made in the manner specified in section 73 or section 74

 The refund to the deductor or the deductee arising on account of excess or erroneous deduction shall be dealt with in accordance with the provisions of section 54

Provided that no refund to the deductor shall be granted, if the amount deducted has been credited to the electronic cash ledger of the deductee.

Penalty for non-filing of GSTR-7

Delay in filing of GSTR-7 results in a penalty of Rs. 200 per day for each day of default, however the maximum late fee cannot exceed Rs. 5000. In addition to the late, interest @ 18% p.a. is also levied on the TDS amount for the period of default starting from the date on which TDS is to be deposited till the actual date of deposit.