No Late Fees for Filing GSTR-7 Returns After Deadline: Key Insights and Compliance Requirements

The Goods and Services Tax (GST) system in India mandates that certain registered taxpayers, specifically those required to deduct Tax Deducted at Source (TDS), file GSTR-7 returns every month. The return captures the details of TDS deducted, paid, and payable, including any refund claims. While filing GSTR-7 is necessary for taxpayers involved in TDS deductions, those who have no TDS transactions can file a ‘nil’ return. Despite the exemption from late filing fees for nil GSTR-7 returns, it is crucial to understand the implications of non-compliance.

No Late Fees for Nil GSTR-7 Filing: A Relief for Taxpayers

As per the recent update from GSTN, taxpayers filing ‘nil’ GSTR-7 returns after the due date are not required to pay late filing fees. This provision, effective from the October 2024 return period, offers relief for those with no TDS deductions in a given month. However, this does not exempt taxpayers from filing the return. Since GSTR-7 filing is sequential, failing to file one month’s return will prevent the filing of subsequent months’ returns. The deadline for filing the return is the 10th of each month, and taxpayers must ensure timely submission, even if no TDS was deducted.

Penalties for Non-Filing or Late Filing of GSTR-7

While taxpayers who file nil returns late are exempt from late fees, failure to file GSTR-7 on time or not deducting TDS attracts significant penalties. According to GST provisions, if TDS is not deducted, is short-deducted, or is not deposited with the government, a penalty of ₹10,000 or an amount equivalent to the tax not deducted (whichever is higher) will be levied. Furthermore, the recovery of tax from a deductor will follow the procedure specified under Sections 73 and 74 of the GST Act.

Conclusion

Timely filing of GSTR-7 is a requirement for GST-registered taxpayers involved in TDS deduction. While nil returns offer relief from late filing fees, non-compliance with filing or TDS deduction can lead to penalties.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.