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17 April 2020

TDS return (GSTR-7) and its payment under GST during COVID - 19 pandemic

In view of distress in the country due to COVID-19 pandemic, the Ministry of Law & Justice, recently on 31 March 2020, issued the Taxation & Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 in order to provide extension of various time limits.

This ordinance vide its Section 8 seeks to insert Section 168A in CGST Act, 2017 which provides power to the government to make necessary changes in law to extend the time limit in respect of actions which cannot be completed or complied with due to unforeseen circumstances. Further, this power to issue notification has been granted with retrospective effect not earlier than date of commencement of this Act, i.e. 01 July 2017.

Furnishing of GST TDS return

In pursuance of powers given under Section 168A ibid., the CBIC issued Notifications No. 30/2020 to 36/2020 - Central Tax on 03 April 2020 providing various extensions/waivers. Subsequent to issuance of these notifications, there were discussions going on regarding extension of filing of TDS return, i.e. Form GSTR-7.

Notification No. 35/2020 - Central Tax dated 03 April 2020 (effective retrospectively from 20 March 2020) provides that any time limit for completion of any compliance under GST law which falls between 20 March 2020 to 29 March 2020 and could not be made due to the spread of pandemic COVID-19 in the country, then such time limit shall be extended upto 30 June 2020. The notification although makes certain exclusions and contains a list of sections to which such notification shall not apply.

Requirement for filing TDS return has been given under Section 39(3) of CGST Act, 2017 which is not excluded from the purview of Notification no. 35/2020, and thus, time limit of furnishing return of TDS, i.e. Form GSTR-7 for the month of March, April and May 2020 has been extended till 30 June 2020. The same is also clarified by CBIC vide Circular No. 136/06/2020-GST dated 03 April 2020 (S. No. 9 of table given in Point No. 3).

Payment of TDS so deducted to Government exchequer

Further, another confusion was the implication of interest liability since Notification no. 35/2020 - Central Tax dated 03 April 2020 specifically excluded from its scope provisions of Section 50 of CGST Act, 2017. However, it must be noted that Notification No. 35/2020 does not exclude Section 51 of CGST Act, 2017 from its scope which contains provisions related to tax deducted at source and provides for payment of TDS so deducted to Government exchequer. Ergo, since time limit for payment of TDS so deducted has also been extended till 30 June 2020 vide Section 51, application of provisions of Section 50, i.e. interest will not come into picture. This view has also been clarified by CBIC later vide Circular No.137/07/2020-GST dated 13 April 2020 (S. No. 5 of table contained in Point No. 2).


Therefore, both the due date for furnishing of TDS return for the months March to May 2020 as well as payment of the TDS so deduced to Government exchequer has been extended to 30 June 2020 and no interest implication shall arise for payment made till that date.