Date: October 8, 2024
Effective From: November 1, 2024
In a major relief to registered persons required to deduct tax at source (TDS) under section 51 of the Central Goods and Services Tax (CGST) Act, 2017, the Central Board of Indirect Taxes and Customs (CBIC) has issued Notification No. 23/2024 – Central Tax. This notification waives the late fee for delays in filing FORM GSTR-7, applicable from June 2021 onwards.
The notification, following the recommendations of the GST Council’s 53rd meeting, introduces a new structure for late fees, providing complete waiver of late fees in certain cases, particularly when no tax was deducted during the month.
Key Changes Introduced by Notification No. 23/2024
1. Monthly Filing of FORM GSTR-7
According to the recommendations of the GST Council, every registered person required to deduct tax at source (TDS) under section 51 of the CGST Act must file FORM GSTR-7 on a monthly basis. This filing is mandatory, regardless of whether any TDS has been deducted during that month or not.
2. Late Fee Waiver
The notification provides relief from late fees for delays in filing FORM GSTR-7. The key provisions include:
| Scenario | Late Fee Structure |
|---|---|
| Late filing of FORM GSTR-7 with TDS | The late fee is capped at ₹25 per day (CGST), with a maximum of ₹1,000 (CGST) per return. |
| Nil TDS Return (no tax deducted) | Complete waiver of late fee if no tax was deducted at source in the month. |
3. Key Provisions of the Waiver
- Capping of Late Fee for Delays: For registered persons who have failed to file FORM GSTR-7 by the due date but have deducted tax at source, the late fee is capped at ₹25 per day, subject to a maximum of ₹1,000 for a single return.
- Full Waiver for Nil Returns: For months where no tax was deducted at source (Nil TDS), the late fee is fully waived, meaning no penalty is payable for delays in filing the return.
- Past Period Regularization: The waiver applies retrospectively for delays in filing GSTR-7 from June 2021 onwards.
Invoice-wise Details in GSTR-7
In addition to the waiver, the GST Council has recommended that registered persons must provide invoice-wise details of the tax deducted at source (TDS) in FORM GSTR-7. This ensures that there is greater transparency and traceability of TDS amounts deducted by registered persons.
Objective of the Amendment
The primary objectives of this amendment are:
- Ease Compliance: By waiving the late fees for Nil returns and capping the fees for TDS filers, the notification aims to reduce the compliance burden on businesses.
- Encourage Timely Filing: The new late fee structure encourages timely filing of FORM GSTR-7 without penalizing registered persons who have not deducted any tax during the month.
- Clarification on Nil Returns: The full waiver of the late fee for Nil returns provides much-needed clarity for businesses that did not deduct tax at source during certain months, ensuring they are not unfairly penalized.
Implications for Registered Persons
- Monthly Filing Obligation: All registered persons under section 51 of the CGST Act must file FORM GSTR-7 on a monthly basis, regardless of whether TDS has been deducted during the period.
- Late Fee Structure:
- A reduced late fee of ₹25 per day (CGST) is applicable for delays in filing when TDS has been deducted, capped at ₹1,000 per return.
- Nil returns (where no TDS was deducted) are entirely exempt from late fees.
- Past Period Regularization: The relief extends retroactively from June 2021 onwards, regularizing past non-compliance with respect to delayed filing of FORM GSTR-7.
| Category | Late Fee | Cap |
|---|---|---|
| TDS deducted and filed late | ₹25 per day | ₹1,000 per return |
| No TDS deducted (Nil return) | Nil | Nil |
Effective Date
The provisions of Notification No. 23/2024 will come into effect from November 1, 2024. This means that any delays in filing FORM GSTR-7 after this date will follow the new late fee structure, while past delays from June 2021 onwards will be regularized based on this notification.
Notification No. 23/2024 brings much-needed relief to registered persons required to deduct tax at source under section 51 of the CGST Act. The waiver of late fees, particularly for Nil returns, reduces the compliance burden and encourages timely filing of returns. With the introduction of invoice-wise details in FORM GSTR-7, the government ensures greater transparency and accountability in TDS deductions.
Registered persons should take note of the new filing requirements and late fee structure to remain compliant with GST regulations moving forward.
This article provides a detailed overview of Notification No. 23/2024 and explains its impact on registered persons required to file FORM GSTR-7 under the **GST
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