New Delhi: In a move aimed at enhancing the granularity and accuracy of data related to Tax Deducted at Source (TDS) under the Goods and Services Tax (GST) regime, the government has amended Form GSTR-7 to incorporate invoice-wise reporting. This significant change, introduced through Notification No. 09/2025 – Central Tax dated February 22, 2025, is set to become effective for return periods starting from April 2025, impacting TDS deductors across the country. While the necessary amendments to the form have been notified, the technical implementation on the GST portal is currently underway.
Form GSTR-7 is a monthly return that needs to be filed by individuals or entities who are required to deduct TDS under the provisions of Section 51 of the CGST Act, 2017. This includes government departments, local authorities, governmental agencies, and other notified persons who make payments exceeding a specified threshold (currently ₹2.5 lakh per contract) to a supplier for taxable goods or services or both. The purpose of deducting TDS under GST is to create a mechanism for the government to track transactions and ensure a steady stream of revenue, particularly from supplies made to government entities and large organizations. The amount of TDS deducted by the deductor is then available as credit to the supplier (the deductee) in their electronic cash ledger on the GST portal, which they can utilize for discharging their GST liabilities.
Prior to this amendment, the reporting in Form GSTR-7 was done on an aggregate basis for each deductee Goods and Services Tax Identification Number (GSTIN). Deductors would report the total amount on which TDS was deducted and the total TDS amount for each supplier during the return period. While this provided a summary of the TDS deducted, it lacked the specific details linking the deduction to individual invoices. This often posed challenges for the deductees in reconciling the TDS credit appearing in their GSTR-2A or GSTR-2B with their books of accounts and the specific invoices raised.
The amendment mandating invoice-wise reporting in Form GSTR-7 will fundamentally change how TDS deductors furnish their monthly returns. Instead of providing consolidated figures for each supplier, deductors will now be required to upload details of every invoice on which TDS has been deducted during the reporting period. This will include particulars such as the invoice number, invoice date, value of the supply, and the amount of TDS deducted against that specific invoice. This level of detail aims to create a clear trail linking the TDS deduction to the underlying transaction documented by the invoice.
For TDS deductors, this change will necessitate a more meticulous record-keeping process. They will need to ensure that all relevant invoice details are accurately captured and furnished in the GSTR-7 return. This might involve adjustments to internal accounting systems and processes to accommodate the higher volume and granularity of data reporting. While it may initially increase the compliance effort, accurate invoice-wise reporting is expected to reduce future discrepancies and potential queries from tax authorities.
For the deductees (suppliers), the move to invoice-wise reporting in GSTR-7 is likely to be beneficial. The TDS credit reflected in their GSTR-2A/2B will now be linked to specific invoices, making reconciliation significantly easier and more accurate. This improved visibility and ease of reconciliation can help suppliers to promptly and correctly claim the TDS credit, thereby improving their working capital cycle and overall GST compliance.
The GST Network (GSTN) has acknowledged the notification and is in the process of developing and testing the functionality for invoice-wise reporting in Form GSTR-7 on the GST portal. The official communication indicates that the implementation is in advanced stages and the updated functionality will be deployed “soon” or “shortly.” Users of the GST portal, particularly those required to file Form GSTR-7, will be notified once the changes are made live and the invoice-wise reporting becomes operational on the platform. This transition marks another step in the evolution of the GST system towards greater transparency, automation, and improved data matching for better tax administration and compliance.
Goods and Services Tax
Government of India, States and Union Territories
Invoice-wise Reporting Functionality in Form GSTR-7 on portal-reg
May 6th, 2025
Vide Notification No. 09/2025 – Central Tax dated 22.02.2025, Form GSTR-7 has been amended to capture invoice-wise reporting with effect from 01.01.2025 i.e. the return period for April 2025 onwards.
In this regard it is to inform that development and testing of the same is underway, the implementation of invoice-wise reporting in Form GSTR-7 in GST portal will be deployed on portal soon. Thus, the enhanced functionality shall be deployed shortly, and users will be duly informed once the changes are made live on the portal.
Regards,
GSTN Team
