GSTR-7 and TDS Under GST

The Goods and Services Tax (GST) framework in India, introduced on 1st July 2017, brought a unified taxation system that revolutionised the way businesses and government entities handle tax compliance. Among the various return forms under GST, GSTR-7 holds a unique and critical position — it is the return specifically filed by persons who are required to deduct Tax Deducted at Source (TDS) under the GST regime.

As of 2026, the GST TDS mechanism has become a well-established compliance requirement for a large section of government entities, public sector undertakings, and certain notified bodies. Understanding GSTR-7 in its entirety — from eligibility to filing, from penalties to refunds — is essential for every GST-registered TDS deductor and supplier dealing with such entities.

This comprehensive guide covers every aspect of GSTR-7 and TDS under GST, updated with the latest provisions, amendments, and notifications applicable in 2026 under Indian law.

What is TDS Under GST?

Tax Deducted at Source (TDS) under GST is a mechanism whereby the recipient (deductor) of goods or services deducts a specified percentage of the tax amount from the payment made to the supplier (deductee) and deposits it with the government. This provision is governed by Section 51 of the CGST Act, 2017.

TDS under GST was initially notified and made effective from 1st October 2018 and has been an integral part of GST compliance since then. The deducted amount is reflected as a credit in the electronic cash ledger of the supplier.

Purpose of TDS Under GST

• Prevents tax evasion by ensuring tax is deposited at the source of transaction
• Creates a digital audit trail of government-related B2B transactions
• Ensures timely remittance of GST to the government exchequer
• Reduces the burden on tax authorities to chase unpaid liabilities
• Improves transparency in government procurement and contracting

What is GSTR-7?

GSTR-7 is a monthly return filed by every registered person who is required to deduct TDS under Section 51 of the CGST Act, 2017. This return contains details of:

• TDS deducted during the month
• Amount of TDS paid to the government
• TDS refund claimed if any
• Any amendments to earlier returns

GSTR-7 is auto-populated in GSTR-7A for the deductee (supplier), giving the supplier visibility of the TDS deducted against their GSTIN. The supplier can then use this credit against their tax liability.

Key Features of GSTR-7

• Monthly filing mandatory — even if no TDS was deducted during the month (Nil return required)
• Filed on the GSTN portal at www.gst.gov.in
• Applicable for both CGST + SGST (for intra-state supply) and IGST (for inter-state supply)
• Deductee can accept or reject TDS in GSTR-7A
• Late fees and interest apply on delayed or incorrect filing

Who is Required to Deduct TDS Under GST? (Section 51)

As per Section 51 of the CGST Act, 2017 and relevant notifications issued under it, the following entities are mandatorily required to deduct TDS under GST in 2026:

Note: Private companies and individuals, even if they are government contractors, are NOT required to deduct TDS under GST unless specifically notified.

Threshold Limit for TDS Deduction Under GST

TDS under GST is applicable only when the total value of taxable supply under a single contract between the deductor and supplier exceeds Rs. 2,50,000 (Rupees Two Lakh Fifty Thousand).

Rate of TDS Deduction Under GST (2026)

The rate of TDS deduction under GST as applicable in 2026 is as follows:

The total effective TDS rate is 2% in all cases, whether intra-state or inter-state. TDS is deducted on the value of taxable supply, excluding GST.

Illustration with Example (2026)

Suppose a State Government department issues a work order of Rs. 5,00,000 (taxable value) to a contractor for civil construction work. The applicable GST rate is 12%.

GST Registration for TDS Deductors

Every entity required to deduct TDS under GST must obtain a separate GSTIN specifically for TDS purposes, even if they already hold a GSTIN for their regular taxable supplies. The registration for TDS deductor is distinct from regular GST registration.

Process of TDS Registration Under GST

1. Visit the GSTN portal at www.gst.gov.in
2. Click on ‘Services’ > ‘Registration’ > ‘New Registration’
3. Select Taxpayer Type as ‘Tax Deductor’
4. Fill in PAN, legal name, state, and authorised signatory details
5. Upload required documents (authorisation letter, PAN, address proof)
6. Submit the application — ARN is generated
7. After verification, GSTIN is issued for TDS purpose

Once registered, the TDS deductor receives a unique GSTIN that is to be used exclusively for filing GSTR-7 returns and depositing TDS amounts.

Structure and Contents of GSTR-7 Form

GSTR-7 is a structured return form available on the GST portal. Below is a detailed breakdown of each table and section within the form:

Table 1 – GSTIN of Deductor

Auto-populated from the registered GSTIN of the TDS deductor. This field is not editable.

Table 2 – Name of Deductor

Auto-populated from GST registration records. Not editable by the filer.

Table 3 – Return Period

Specifies the month and year for which the TDS return is being filed. Example: February 2026.

Table 4 – Details of TDS Deducted

This is the most critical table. It contains:

• GSTIN of the supplier (deductee)
• Name of the supplier
• Total value of contract/supply
• Amount of TDS deducted under CGST, SGST/UTGST, and IGST
• Whether the supply is intra-state or inter-state

Table 5 – Amendments to Table 4

Allows correction of TDS details reported in any previous GSTR-7. Any changes, additions, or deletions to earlier TDS entries are reported here.

Table 6 – TDS Payable and Paid

Summarises:

• Total TDS payable for the month
• Amount of TDS already paid through challan (PMT-06)
• Balance TDS payable, if any

Table 7 – Late Fees and Interest

Captures any late fee or interest payable on account of delayed filing or delayed payment of TDS.

Table 8 – Refund Claimed

If excess TDS has been deposited, the deductor can claim a refund through this table by filing a refund application under RFD-01.

Due Date for Filing GSTR-7 (2026)

GSTR-7 is a monthly return and must be filed by the 10th of the following month for each calendar month. If the 10th falls on a public holiday or Sunday, the next working day is the effective due date.

Step-by-Step Process to File GSTR-7 on GST Portal

Step 1: Login to GST Portal

Go to www.gst.gov.in and log in using your TDS GSTIN and password.

Step 2: Navigate to GSTR-7

Go to Services > Returns > Returns Dashboard. Select the tax period (month and year) and click on ‘GSTR-7’.

Step 3: Fill in TDS Details (Table 4)

Enter the GSTIN of each supplier from whom TDS has been deducted during the month, along with the taxable value and TDS amount under CGST, SGST/UTGST, or IGST as applicable.

Step 4: Make Amendments if Required (Table 5)

If any previous month’s TDS details require correction, use Table 5 to make the necessary amendments.

Step 5: Verify TDS Payable (Table 6)

The system auto-calculates the total TDS payable. Ensure the challan (PMT-06) payment has been made in the Electronic Cash Ledger before filing.

Step 6: Preview and Submit

Click on ‘Preview’ to review the entire return. Once confirmed, click on ‘Submit’. The status changes to ‘Submitted’.

Step 7: File with DSC or EVC

After submission, file the return using Digital Signature Certificate (DSC) — mandatory for companies — or Electronic Verification Code (EVC) for other taxpayers. The status changes to ‘Filed’.

Step 8: Download Acknowledgement

Download the ARN (Acknowledgement Reference Number) as proof of filing.

How to Deposit TDS Under GST – Payment Process

TDS deducted under GST must be deposited into the government’s Electronic Cash Ledger using Challan PMT-06 on the GST portal. The process is as follows:

8. Login to GSTN portal using TDS GSTIN
9. Go to Services > Payments > Create Challan
10. Select the tax head: CGST, SGST/UTGST, or IGST as applicable
11. Enter the TDS amount to be deposited under each head
12. Choose mode of payment: Net Banking, NEFT/RTGS, OTC (Over the Counter)
13. Generate challan and make payment
14. The amount is credited to the Electronic Cash Ledger
15. While filing GSTR-7, the paid amount reflects in Table 6

It is advisable to deposit TDS before the due date of filing GSTR-7 to avoid interest and penalties.

GSTR-7A – TDS Certificate for Suppliers

When a deductor files GSTR-7, the corresponding details are auto-populated in GSTR-7A, which is available to the supplier (deductee) on the GST portal. GSTR-7A is essentially the TDS certificate issued under GST, equivalent to Form 16A under Income Tax.

Key Details in GSTR-7A

• GSTIN and name of the deductor
• GSTIN and name of the supplier
• Amount of contract or invoice
• TDS deducted under CGST, SGST/UTGST, and IGST
• Month and year of deduction

Supplier’s Action on GSTR-7A

The supplier can view the TDS details in GSTR-7A and accept or reject each entry:

• Accepted entries: The TDS amount is credited to the supplier’s Electronic Cash Ledger as available balance, which can be used to pay future GST liabilities.
• Rejected entries: The TDS entry is reverted to the deductor’s GSTR-7 for correction or amendment.

This two-way mechanism ensures accuracy and prevents fraudulent TDS claims.

Late Fee and Interest for GSTR-7 Non-Compliance (2026)

Failure to file GSTR-7 on time or non-payment of TDS attracts both late fees and interest as prescribed under the CGST Act:

Refund of Excess TDS Under GST

If a TDS deductor has deposited excess TDS — either due to computation error, cancelled contract, or any other reason — the excess amount can be refunded. The refund process is as follows:

When Can Refund Be Claimed?

• TDS deducted exceeds the actual liability due to contract revision
• TDS deposited by mistake on an exempt supply
• Duplicate TDS payment
• Contract cancelled after TDS deposit

Process for TDS Refund Under GST (2026)

16. The deductor must file GSTR-7 correctly reflecting the correct TDS deducted
17. File refund application in Form RFD-01 on the GST portal
18. Select category: ‘Excess Balance in Electronic Cash Ledger’
19. Fill in the refund amount under the appropriate tax head
20. Submit along with supporting documents
21. The jurisdictional tax officer reviews the application
22. Refund is sanctioned in Form RFD-06 and credited to the registered bank account

Note: Where the deductee (supplier) has already accepted the TDS credit in GSTR-7A and used it towards tax payment, the deductor cannot claim a refund unless the supplier reverses the credit.

Amendments to GSTR-7 – Rules and Procedure

Errors and omissions in a filed GSTR-7 can be corrected through amendments in the subsequent month’s GSTR-7 filing using Table 5.

What Can Be Amended?

• Incorrect GSTIN of the supplier
• Wrong taxable value entered
• Incorrect TDS amount under CGST, SGST, or IGST
• Supplies wrongly included (not liable to TDS)

Restrictions on Amendments

• Amendments can only be made if the deductee has NOT accepted the TDS in GSTR-7A
• Once the deductee accepts the TDS credit, the original entry becomes locked
• Amendments cannot be made beyond 3 years from the due date of the return in which the error occurred (Section 39 read with Section 29 principles)

Transactions Where TDS Under GST is NOT Applicable

Not every government payment is subject to TDS under GST. The following transactions are specifically excluded:

Impact of TDS on Input Tax Credit (ITC) for Supplier

From the supplier’s perspective, TDS deducted and reflected in GSTR-7A creates a credit in their Electronic Cash Ledger — not in the Electronic Credit Ledger. This distinction is critical:

This means TDS credit is more flexible for suppliers, as it can be used to pay interest, late fees, or penalties — unlike ITC which can only offset output tax liability.

Recent Updates and Amendments in GSTR-7 (2025-2026)

Finance Act 2025 – Key Changes Impacting GSTR-7

• The late fee cap for GSTR-7 has been rationalised — maximum late fee capped at Rs. 5,000 per return, down from earlier higher amounts.
• GSTN has enabled auto-population of deductee details from GSTR-1 data for ease of TDS deduction entry.
• Enhanced validation checks introduced on the GST portal to flag mismatches between GSTR-7 entries and deductee’s GSTR-1.

CBIC Notifications and Circulars (2025-26)

• CBIC has clarified through circular that TDS deductors who are not liable to file GSTR-7 for a given month due to zero transactions must still file a Nil GSTR-7.
• Relaxation provided for government entities during natural calamities or force majeure events through special time-limited notifications.
• E-invoicing integration: For government entities required to generate e-invoices, TDS deduction data flows through the Invoice Registration Portal (IRP), improving audit trails.

GSTN Portal Improvements in 2026

• New dashboard for TDS deductors showing cumulative TDS deducted, pending acceptance by suppliers, and pending TDS deposits.
• Automated SMS and email reminders to TDS GSTINs on approaching due dates.
• Offline utility updated to support bulk upload of TDS entries for departments with high volumes.

Compliance Best Practices for TDS Deductors Under GST

Record-Keeping

• Maintain a contract register with GSTIN of all suppliers, contract values, and TDS applicability status.
• Keep a monthly TDS computation worksheet before filing GSTR-7.
• Reconcile GSTR-7 with payment vouchers and challan records (PMT-06).

Filing Discipline

• File GSTR-7 by the 10th of every month without fail — even Nil returns.
• Never delay TDS deposit beyond the due date of GSTR-7 to avoid 18% interest.
• Cross-check supplier GSTINs before entering in Table 4 to avoid rejected entries.

Coordination with Suppliers

• Inform suppliers at the time of payment about TDS deduction so they can reconcile with GSTR-7A.
• If a supplier rejects TDS in GSTR-7A, promptly investigate and amend in next month’s GSTR-7.
• Provide copies of GSTR-7A to suppliers as TDS certificates for their records.

Common Mistakes to Avoid While Filing GSTR-7

Difference Between TDS Under GST and TDS Under Income Tax

Frequently Asked Questions (FAQs) on GSTR-7 and TDS Under GST

Q1. Is GSTR-7 mandatory even if no TDS was deducted in a month?

Yes. A Nil GSTR-7 must be filed by the 10th of the following month even if no TDS was deducted. Failure to do so attracts late fees of Rs. 200 per day.

Q2. Can a private company be required to deduct TDS under GST?

No. As per Section 51 of the CGST Act and related notifications, only specific government entities, PSUs, and governmental authorities are required to deduct TDS. Private companies are not covered unless specifically notified.

Q3. What if a supplier’s GSTIN is cancelled after TDS is deducted?

The TDS already deducted is valid. The deductor must still file GSTR-7 and deposit the TDS. The supplier can contact their jurisdictional GST officer to claim the credit even after GSTIN cancellation.

Q4. Can TDS credit in Electronic Cash Ledger be used for GST payments?

Yes. The TDS credit reflected in the supplier’s Electronic Cash Ledger after accepting GSTR-7A can be used to pay any GST liability including tax, interest, late fee, or penalty.

Q5. What is the time limit for accepting TDS in GSTR-7A?

There is no strict statutory time limit for accepting TDS in GSTR-7A mentioned in the Act. However, best practice is to accept or reject within the same tax period to avoid reconciliation issues. GSTN portal may restrict actions after a certain period.

Q6. What is the penalty for not deducting TDS under GST?

Under Section 122 of the CGST Act, a penalty equal to the amount of TDS not deducted is levied. Additionally, the deductor is liable to pay the TDS amount along with interest at 18% per annum from the due date till date of payment.

Q7. Is TDS under GST applicable on advance payments?

No. TDS under GST is applicable only when actual supply of goods or services takes place and a tax invoice is issued. Advance payments do not trigger TDS liability.

Q8. How many GSTINs does a TDS deductor require for multiple states?

A TDS deductor must obtain a separate GSTIN for each state from which it makes payments subject to TDS. This is because GST is a state-level tax and TDS on intra-state supplies goes to the respective state government.

Conclusion

GSTR-7 and TDS under GST form a vital compliance layer in India’s GST ecosystem, primarily targeting government entities and public sector undertakings that make payments to GST-registered suppliers. With TDS at a rate of 2%, a threshold of Rs. 2,50,000 per contract, and a monthly filing due date of the 10th, GSTR-7 demands consistent attention and timely action from all notified TDS deductors.

As India’s digital tax infrastructure matures in 2026, GSTN’s enhanced portal capabilities, automated validations, and seamless integration with e-invoicing have made GSTR-7 compliance more streamlined. Yet, non-compliance continues to attract significant penalties — including a late fee of Rs. 200 per day and interest at 18% per annum — making it imperative for all eligible entities to build robust internal processes for TDS deduction, challan payment, and return filing.