GSTR-7 explained: the return for GST tax deducted at source

Who deducts TDS

Section 51 requires a department or establishment of the government, a local authority, a government agency and other notified persons to deduct TDS at 2 percent (1 percent CGST plus 1 percent SGST, or 2 percent IGST) when paying a supplier under a contract whose taxable value exceeds Rs. 2.5 lakh. No deduction is made where the supplier's location and the place of supply are in a state different from the recipient's registration. Deductors register separately as TDS registrants.

Filing GSTR-7

GSTR-7 is filed under Rule 66 by the 10th of the month after deduction, and the TDS is paid to the government through the deductor's cash ledger. From the September 2025 tax period, deductors report TDS invoice-wise, giving invoice number, date, value and tax deducted for each deductee, instead of a consolidated figure per supplier. Late filing attracts a late fee and interest on delayed payment of TDS.

For the supplier (deductee)

• The TDS appears in the TDS and TCS credit received section on the portal and in GSTR-2A
• Accept the entry to have it credited to your electronic cash ledger; reject if the amount or details are wrong
• A TDS certificate in GSTR-7A is generated for each deductee once GSTR-7 is filed
• The credited amount can be used to pay tax or claimed as refund if surplus

Common problems

Suppliers often see TDS credit missing because the deductor reported the wrong GSTIN or did not file GSTR-7. Deductors sometimes deduct on contracts below the threshold or on inter-state cases where no deduction applies. Each side should reconcile with the other quarterly. A professional can help a contractor track TDS credits across departments and claim refund of excess cash balance.

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This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.