Invoice-Wise Reporting in GSTR-7 | GSTN Advisory 6 May 2025
INTRODUCTION for
The Government of India has consistently aimed to refine the GST system for improved transparency, compliance, and data reconciliation. An important advancement in this regard was the modification of Form GSTR-7 (the monthly TDS return form) via advisory issued on 6th May, 2025 by the Goods and Service Tax Network (GSTN) which introduced invoice-wise reporting functionality.
This change is effective for return periods starting April 2025 onwards, and will transform how TDS deductors file their returns under the Goods and Services Tax (GST) regime.
BACKGROUND
Under Section 51 of the CGST Act, 2017, certain specified persons are required to deduct TDS while making payments exceeding Rs2.5 lakh per contract for taxable supplies of goods or services. These include:
• Departments of Central or State Government
• Local authorities
• Governmental agencies
• Public Sector Undertaking (PSUs) (as notified by CBIC in Notification no. 18/2018, dated 13th September, 2018)
• Notified entities
These deductors are required to file Form GSTR-7 on a monthly basis to declare the TDS deducted, which is then credited to the electronic cash ledger of the deductee (supplier). The GSTR-7 return is essential in ensuring timely and accurate reflection of TDS credits to suppliers.
SYSTEM OF AGGREGATE REPORTING
Prior to the amendment, TDS details were furnished aggregately, per deductee GSTIN. Each entry included the total taxable amount and total TDS amount deducted during the period. There was no linkage with individual invoices being captured.
Challenges:
• The absence of invoice-level granularity led to mismatches and compliance complications.
• Verifying exact TDS entries became time-consuming and error-prone.
AMENDMENT: INTRODUCTION OF INVOICE-WISE REPORTING
As per the advisory issued on 6th May, 2025, the revised Form GSTR-7 mandates invoice-level disclosures. Now, deductors must report each invoice for which TDS has been deducted during the return period.
New Data Points to be reported:
• Invoice Number
• Invoice Date
• Taxable Value
• TDS Amount Deducted
• Supplier GSTIN
This granular reporting approach significantly enhances traceability and accuracy.
IMPLICATIONS OF THE AMENDMENT
For TDS Deductors:
• Requires meticulous record-keeping and real-time data capture.
• Accounting systems and internal processes may need upgrades.
• Initially, there may be a higher compliance burden, but it is expected to streamline over time.
For Deductees (Suppliers):
• Improved visibility into TDS entries.
• Easier invoice-level reconciliation with GSTR-1.
• Faster claiming of TDS credit, improving cash flow and compliance timelines.
GST PORTAL IMPLEMENTATION STATUS
As of May 6, 2025, GSTN has confirmed that the development and testing of the invoice-wise functionality is in progress. Deployment is imminent, and users will be duly notified once it goes live. The GST portal’s upgrade is aimed at aligning system capabilities with the amended legal requirements to support a seamless reporting experience for users.
KEY BENEFITS OF INVOICE-WISE REPORTING
Stakeholder Benefit
Deductors
Structured data reporting, better audit trail Deductees
Accurate TDS credit reconciliation Tax Authorities Improved data analytics and reduced mismatch notices System (GSTN) Enhanced automation, fraud detection, and compliance tracking
TAKEAWAY - TDS deductors should start preparing internally, including updating ERP/accounting software to support invoice-level data capture.
- Training and awareness sessions should be conducted for personnel handling GST returns.
- Deductees should review their suppliers’ GSTR 1 filings to verify that TDS credits correspond correctly to issued invoices, and coordinate with deductors to resolve any mismatches promptly.
As businesses prepare for the shift to invoice‑wise TDS reporting in Form GSTR‑7, streamline your compliance with Tax‑O‑Smart.
Our Smart INVOICE platform offers GST invoicing, accounting, and inventory management software. With features like ERP integration, bulk file imports, real-time dashboards, multi-user access, and comprehensive GST invoice support—detailing product names, quantities, supplier/purchaser information, pricing, discounts, and more—it ensures your TDS data is accurate, compliant, and ready for GSTR‑7 filing.
DISCLAIMER
The information contained in this document is prepared by R.J. Soni & Associates and TaxOSmart LLP (hereinafter referred to as RJSA) for information purpose only. It does not constitute any legal advice or tax advice. In no way, this document should be treated as a marketing material or efforts to solicit a client. While we have made every attempt to ensure that the information contained in this document is true, RJSA, its partners and/or any of its employees make no claims / guarantee about its accuracy, completeness, or up-to-date character, or warranty, express or implied, including the warranty of opinions expressed for a particular purpose, or assume any liability or responsibility for the accuracy, completeness, or usefulness of any information available from this document.
The Government of India has consistently aimed to refine the GST system for improved transparency, compliance, and data reconciliation. An important advancement in this regard was the modification of Form GSTR-7 (the monthly TDS return form) via advisory issued on 6th May, 2025 by the Goods and Service Tax Network (GSTN) which introduced invoice-wise reporting functionality.
This change is effective for return periods starting April 2025 onwards, and will transform how TDS deductors file their returns under the Goods and Services Tax (GST) regime.
BACKGROUND
Under Section 51 of the CGST Act, 2017, certain specified persons are required to deduct TDS while making payments exceeding Rs2.5 lakh per contract for taxable supplies of goods or services. These include:
• Departments of Central or State Government
• Local authorities
• Governmental agencies
• Public Sector Undertaking (PSUs) (as notified by CBIC in Notification no. 18/2018, dated 13th September, 2018)
• Notified entities
These deductors are required to file Form GSTR-7 on a monthly basis to declare the TDS deducted, which is then credited to the electronic cash ledger of the deductee (supplier). The GSTR-7 return is essential in ensuring timely and accurate reflection of TDS credits to suppliers.
SYSTEM OF AGGREGATE REPORTING
• Verifying exact TDS entries became time-consuming and error-prone.
AMENDMENT: INTRODUCTION OF INVOICE-WISE REPORTING
As per the advisory issued on 6th May, 2025, the revised Form GSTR-7 mandates invoice-level disclosures. Now, deductors must report each invoice for which TDS has been deducted during the return period.
• Invoice Date
• Taxable Value
• TDS Amount Deducted
• Supplier GSTIN
This granular reporting approach significantly enhances traceability and accuracy.
IMPLICATIONS OF THE AMENDMENT
• Accounting systems and internal processes may need upgrades.
• Initially, there may be a higher compliance burden, but it is expected to streamline over time.
• Easier invoice-level reconciliation with GSTR-1.
• Faster claiming of TDS credit, improving cash flow and compliance timelines.
GST PORTAL IMPLEMENTATION STATUS
| Stakeholder | Benefit |
| Deductors | Structured data reporting, better audit trail |
| Deductees | Accurate TDS credit reconciliation |
| Tax Authorities | Improved data analytics and reduced mismatch notices |
| System (GSTN) | Enhanced automation, fraud detection, and compliance tracking |
TAKEAWAY
- TDS deductors should start preparing internally, including updating ERP/accounting software to support invoice-level data capture.
- Training and awareness sessions should be conducted for personnel handling GST returns.
- Deductees should review their suppliers’ GSTR 1 filings to verify that TDS credits correspond correctly to issued invoices, and coordinate with deductors to resolve any mismatches promptly.
As businesses prepare for the shift to invoice‑wise TDS reporting in Form GSTR‑7, streamline your compliance with Tax‑O‑Smart.
Our Smart INVOICE platform offers GST invoicing, accounting, and inventory management software. With features like ERP integration, bulk file imports, real-time dashboards, multi-user access, and comprehensive GST invoice support—detailing product names, quantities, supplier/purchaser information, pricing, discounts, and more—it ensures your TDS data is accurate, compliant, and ready for GSTR‑7 filing.
DISCLAIMER
The information contained in this document is prepared by R.J. Soni & Associates and TaxOSmart LLP (hereinafter referred to as RJSA) for information purpose only. It does not constitute any legal advice or tax advice. In no way, this document should be treated as a marketing material or efforts to solicit a client. While we have made every attempt to ensure that the information contained in this document is true, RJSA, its partners and/or any of its employees make no claims / guarantee about its accuracy, completeness, or up-to-date character, or warranty, express or implied, including the warranty of opinions expressed for a particular purpose, or assume any liability or responsibility for the accuracy, completeness, or usefulness of any information available from this document.
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