The Central Board of Indirect Taxes and Customs (CBIC) has issued Notification No. 20/2024 – Central Tax, dated October 08, 2024, amending Rule 66 of the Central Goods and Services Tax (CGST) Rules, 2017. This amendment, effective from November 1, 2024, introduces a specific timeline for the submission of FORM GSTR-7 by persons required to deduct Tax at Source (TDS) under Section 51 of the CGST Act.
Key Amendment in Rule 66
Rule 66 governs the Form and Manner of Submission of Return by a Person Required to Deduct TDS. Previously, the rule required the deductor to file FORM GSTR-7 electronically, but it did not specify a deadline for submission. This lack of a timeline often resulted in varying practices among deductors and occasional delays in filing, leading to inefficiencies in the GST system.
To address this issue, the CBIC has now introduced a clear deadline for the submission of FORM GSTR-7.
Amendment in Rule 66:
- Old Rule: The rule required registered persons (deductors) to file a return in FORM GSTR-7 electronically but did not specify a deadline.
- New Rule (Effective November 1, 2024): The return in FORM GSTR-7 must be furnished on or before the 10th day of the month succeeding the calendar month in which the deduction was made.
Comparative Overview: Before and After the Amendment
| Provision | Before Amendment | After Amendment (Effective November 1, 2024) |
|---|---|---|
| Filing Requirement | Every registered person required to deduct TDS under Section 51 shall furnish a return in FORM GSTR-7 electronically through the common portal. | Every registered person required to deduct TDS under Section 51 shall furnish a return in FORM GSTR-7 on or before the 10th day of the month succeeding the relevant month. |
| Timeline for Submission | No specific timeline provided for filing FORM GSTR-7. | FORM GSTR-7 must be submitted on or before the 10th day of the month following the month of deduction. |
Importance of Timely Filing of FORM GSTR-7
FORM GSTR-7 is essential for deductors under Section 51 of the CGST Act, as it enables the proper recording and crediting of Tax Deducted at Source (TDS) to the supplier. Timely filing of this return ensures the smooth functioning of the GST system by:
- Crediting TDS to the Supplier: Suppliers can only claim credit of the TDS once the deductor files the return in FORM GSTR-7.
- Efficient GST Administration: Delays in filing the return disrupt the flow of TDS credit and can lead to compliance issues for suppliers.
- Avoiding Penalties: The absence of a filing timeline created ambiguity and inconsistent filing practices among deductors. The new timeline ensures timely compliance, reducing the risk of penalties.
Our Comments
The introduction of a specific timeline for the submission of FORM GSTR-7 provides much-needed clarity and ensures timely compliance for deductors under the TDS provisions of the CGST Act. This amendment:
- Clarifies the Filing Deadline: Deductors must now file FORM GSTR-7 by the 10th day of the month following the month in which the deduction was made.
- Enhances Compliance: With a clear timeline in place, deductors can ensure that they meet their filing obligations on time, reducing compliance risks and avoiding penalties.
- Improves GST Functionality: Timely filing helps suppliers receive their TDS credits faster, contributing to a more efficient GST system.
This change, effective November 1, 2024, will standardize the filing of FORM GSTR-7 across all deductors and promote better adherence to GST regulations.
Visit www.cagurujiclasses.com for practical courses
