Indirect Tax Laws and Practice · TDS and TCS under GST

TDS Deposit, GSTR-7 Return and GSTR-7A Certificate under GST

Updated 11 October 2026 · Fact-checked

A GST deductor deducts 1% under section 51, pays it to the Government within ten days after the end of the month of deduction, and files FORM GSTR-7 by the tenth day of the next month. The deductee then gets the certificate in FORM GSTR-7A and claims credit in the electronic cash ledger.

Understand TDS Deposit, Returns and Certificates

Under section 51, notified deductors such as Government departments, local authorities and governmental agencies deduct tax at 1% from payments to a supplier. This applies when the value of supply under a contract exceeds ₹2,50,000. The value is taken excluding GST shown in the invoice. No deduction is made if the supplier's location and the place of supply are in a State or Union territory different from the recipient's State or Union territory of registration.

This topic is about what happens after deduction. There are four steps: deposit, return, certificate and credit.

Deposit. The deductor must pay the amount deducted to the Government within ten days after the end of the month in which the deduction is made (section 51(2)). If the deductor fails to pay, interest is payable under section 50(1), in addition to the tax deducted (section 51(6)).

Return. Under rule 66, the deductor files FORM GSTR-7 electronically on the common portal, on or before the tenth day of the month following the calendar month. This ten-day wording was inserted with effect from 1 November 2024.

Certificate and credit. The details in GSTR-7 are made available to each deductee on the portal. After validation, the deductee claims the tax deducted in his electronic cash ledger. The certificate under section 51(3) is made available to the deductee in FORM GSTR-7A, based on the return filed. Section 87 of the Rules (rule 87 in the Rules) says the amount deducted under section 51 and claimed by the deductee is credited to his electronic cash ledger.

Be careful with the late fee. Section 47(1) provides a late fee of ₹100 for every day of failure, subject to a maximum of ₹5,000, but it names only returns under section 39, section 45 and section 52. GSTR-7 is a rule 66 return for tax deducted under section 51, and section 47(1) does not name it. So do not quote the ₹100 per day and ₹5,000 figures for GSTR-7 as if section 47(1) fixed them. State the due date and the days of delay, and check the late fee against the provision that actually applies.

Key rules to remember

Rate and threshold of TDS: TDS = 1% × value of supply, if value of supply under a contract > ₹2,50,000; Value excludes CGST, SGST/UTGST, IGST and cess shown in the invoice. Threshold is on total value under a contract.
Deposit time limit: Within 10 days after the end of the month of deduction; Section 51(2). Example: deduction in June, pay by 10 July.
GSTR-7 due date: On or before the 10th day of the month succeeding the month of deduction; Rule 66(1), wording inserted w.e.f. 1 November 2024.
Certificate: FORM GSTR-7A, made available to the deductee on the common portal; Section 51(3) and rule 66(3). It is based on the GSTR-7 return filed.
Days of delay in filing GSTR-7: Days of delay = actual filing date − due date; Section 47(1) names only returns under sections 39, 45 and 52, so do not apply its ₹100 per day and ₹5,000 figures to GSTR-7 unless the question gives the applicable provision. Any late fee is separate from interest on late payment.
Interest on non-payment: Interest under section 50(1) plus tax deducted; Section 51(6).

How to solve TDS Deposit, Returns and Certificates questions

Use this order for any question on deposit, return or certificate. It keeps the computation and the law apart.

1Confirm the deductor is one notified under section 51 and that the payment is for taxable supply.
2Check location: if the supplier's location and place of supply are in a different State or Union territory from the recipient's registration, no deduction is made.
3Take the contract value excluding GST. If it exceeds ₹2,50,000, compute 1% of the payment value.
4Find the month of deduction. Deposit is due within ten days after that month ends.
5GSTR-7 is due by the tenth day of the following month. Count days of delay from that date.
6Do not apply the section 47(1) late fee of ₹100 a day to GSTR-7 on your own. Section 47(1) names only sections 39, 45 and 52, so use a late fee only if the question gives the provision that applies. Add interest under section 50(1) if tax was paid late.
7State the outcome: GSTR-7A to the deductee, credit in his electronic cash ledger after validation.

Quickest way: Date and delay shortcut

When to use it: Use for numerical questions asking the due date or the delay in filing GSTR-7.

Mark the due date as the 10th of the month after deduction.
Count days from the day after the due date to the actual filing date.
State the number of days of delay. Quote a late fee only if the question gives the applicable provision, because section 47(1) does not name GSTR-7.
Compute 1% TDS only if the contract value without GST is above ₹2,50,000.

Common mistakes in TDS Deposit, Returns and Certificates

Computing TDS on the invoice value including GST.
Students use the gross invoice total.
Fix: Use the value excluding CGST, SGST/UTGST, IGST and cess, as the Explanation to section 51(1) says.
Applying the ₹2,50,000 threshold to each invoice instead of the contract.
Students read it as a per-payment limit.
Fix: The test is on total value of supply under a contract.
Quoting the section 47(1) late fee of ₹100 a day and the ₹5,000 cap for GSTR-7.
Students carry over the general late fee rule for returns.
Fix: Section 47(1) names only returns under sections 39, 45 and 52. GSTR-7 is a rule 66 return under section 51. Check the provision that actually applies before you state a late fee.
Deducting tax on an inter-State supply.
Students see the amount is above the threshold and stop checking.
Fix: Check the proviso: no deduction if the supplier's location and place of supply are in a different State or Union territory from the recipient's registration.
Saying the deductor can claim a refund of excess TDS after the deductee has been credited.
Students mix up the refund rules.
Fix: Under section 51(8) no refund goes to the deductor if the amount has been credited to the deductee's electronic cash ledger.
Treating interest and a late-return charge as the same thing.
Both arise from delay.
Fix: Interest under section 51(6) is for failure to pay the deducted tax. Delay in filing GSTR-7 is a separate default. Keep the two apart in your answer.

Worked examples

Example 1

A State Government department awards a works contract to a supplier in the same State for ₹6,00,000 plus 18% GST. The department makes the payment in June. By what date must it deposit the TDS, and how much?

Show the solution

The value of supply excluding GST is ₹6,00,000, which exceeds ₹2,50,000.
TDS at 1% = 1% × ₹6,00,000 = ₹6,000.
Deduction is made in June, so deposit is due within ten days after the end of June.
The last date is 10 July.

Answer: Deduct ₹6,000, and deposit it by 10 July.

Example 2

A deductor deducted tax in August but filed FORM GSTR-7 on 25 September. State the due date, the delay, and what the deductee receives.

Show the solution

GSTR-7 for August is due on or before 10 September.
Filing was on 25 September, so the delay is 25 − 10 = 15 days.
Section 47(1) names only returns under sections 39, 45 and 52, so do not apply its ₹100 per day fee to GSTR-7. Any late fee must be checked against the provision that applies.
After the return is filed, the details are made available to the deductee. The certificate is in FORM GSTR-7A.

Answer: The due date is 10 September and the delay is 15 days. The deductee receives GSTR-7A and, after validation, claims the amount in his electronic cash ledger.

Exam tips

Write the section numbers: 51(2) for deposit, 51(3) for certificate, 51(6) for interest, rule 66 for the return.
In MCQs, watch for options that use the old return date or omit the ten-day wording.
In numerical questions, state both the due date and the number of days of delay.
Do not quote the ₹100 per day and ₹5,000 figures of section 47(1) for GSTR-7. That section names only sections 39, 45 and 52.
Link the answer to the deductee: GSTR-7A and credit in the electronic cash ledger.

Practice questions from TDS and TCS under GST

TDS Deposit, Returns and Certificates in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

TDS Deposit, Returns and Certificates: frequently asked questions

What is the due date for GSTR-7?

The deductor files FORM GSTR-7 on or before the tenth day of the month succeeding the calendar month of deduction. This wording was inserted in rule 66(1) with effect from 1 November 2024.

Does the section 47(1) late fee of ₹100 a day apply to GSTR-7?

Section 47(1) provides ₹100 for every day of failure, up to ₹5,000, but it names only returns under sections 39, 45 and 52. GSTR-7 is a rule 66 return under section 51 and is not named there. Check the provision that actually applies before you state a late fee in an answer.

Who issues the TDS certificate under GST?

The certificate is made available to the deductee on the common portal in FORM GSTR-7A, on the basis of the return the deductor has filed. The deductor therefore must file GSTR-7 first.

How does the deductee get credit of the TDS?

The deductee claims the tax deducted in his electronic cash ledger after validation of the details in the deductor's return. The amount is then credited to his electronic cash ledger.