Ankit Rahangdale is a seasoned finance professional with a distinguished background as a Chartered Accountant. Currently, he leads the Finance Department at Pice. With over five years of invaluable experience in the banking and finance sector, honing his expertise through esteemed institutions such as ICICI Bank and Standard Chartered Bank.
Form GST REG-07 is essential for government entities and e-commerce operators required to deduct (TDS) or collect tax (TCS) under GST.
TDS under GST involves government agencies deducting tax payments at the source to prevent revenue leakage.
E-commerce platforms collecting payments from customers must register for TCS compliance via GST REG-07.
Recent amendments include an increase in the TCS threshold for foreign remittances/travel, removal of TCS on the sale of goods, and reduced TCS rates on certain forest produce.
Timely registration through GST REG-07 helps entities maintain compliance, avoid penalties, and ensure smooth business operations.
Form GST REG-07 is a crucial document for businesses and entities required to comply with GST provisions relating to Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). It forms an integral part of the GST registration process, especially for government bodies, public sector undertakings, and e-commerce operators liable under Sections 51 and 52 of the CGST Act.
By filing an application for registration through this form, eligible entities can meet their registration compliance requirements efficiently via the Common portal. Understanding its purpose and eligibility criteria helps ensure that every person responsible for collecting or deducting tax under GST adheres to statutory obligations smoothly.
Meaning of Tax Deducted at Source (TDS) under GST
TDS under GST refers to the mechanism where a specified percentage is deducted by the payer when making payments for taxable goods or services. This deducted amount is then remitted to the government. The provisions for TDS are outlined under Section 51 of the CGST Act, read with Rule 66 of the CGST Rules. The main objective is to ensure seamless tax collection and avoid revenue leakage.
Who is Liable to Collect TDS Under GST?
Entities that fall under the definition of a person liable to deduct TDS under GST include:
Departments or establishments of the Central or State Government
Governmental agencies
Local authorities
Authorities or boards with more than 51% government ownership
Societies registered under the Societies Registration Act, 1860
Public sector undertakings (PSUs)
Other entities as notified by the government
These organisations are required to apply for GST registration using Form GST REG-07 to ensure compliance before they begin deducting TDS.
Meaning of Tax Collected at Source (TCS) under GST
TCS under GST is applicable to e-commerce operators who collect payment from customers on behalf of vendors selling through their platforms. The tax is calculated as a percentage of the net taxable supplies. Section 52 of the CGST Act governs TCS provisions, and such operators are mandated to register using Form GST REG-07 on the GST portal before collecting TCS.
Who is Liable to Collect TCS Under GST?
TCS applies to e-commerce operators who:
Own or operate digital platforms facilitating the supply of goods or services
Collect consideration on behalf of suppliers
Are registered under GST and fulfil TCS obligations
However, TCS is not applicable to services provided through the platform by:
Unregistered clubs or hotels
Housekeeping services like carpentry or plumbing by unregistered individuals
Passenger transport services via motorbike, taxi, or similar means
These exemptions are important for defining person responsible for TCS compliance.
Pre-Requisites to Apply for GST Registration
The following are the primary documents needed for GST registration application:
PAN card
Aadhaar card
Business registration proof
Identity verification
Photographic evidence
Address evidence of personnel in charge
Business address proof (head office address)
Bank account statement or cancelled cheque
Utility bill, rental agreement, or ownership documentation
A taxpayer will no longer remain a GST registered individual if their registration is cancelled. He will not be required to file GST returns since he will not be required to pay, collect, or claim an input tax credit.
Here are the consequences of GST registration cancellation:
Taxpayers will no longer be required to pay GST.
If a GST registration has been cancelled but the business continues, it will be considered an offence under the GST and there will be severe penalties.
Recent Amendments in TCS Registration
Here are the recent significant amendments made to TCS registration:
1. Enhanced Threshold Limit for TCS
TCS has raised the threshold limit for remittances under the Liberalised Remittance Scheme (LRS) and international travel packages from Rs. 7 Lakhs to Rs. 10 Lakhs. Furthermore, if an education loan funds the education, TCS won't be chargeable on LRS. Since April 1, 2025, TCS on student loans is no longer covered under Section 206C(1G).
2. Removal of TCS on Sale of Goods
Previously, if the total value of the products sold was above Rs. 50 lakhs with additional criteria, the seller was required to pay a TCS as per section 206C(1H). This led to problems with section 194Q, which required the buyer to deduct TDS when purchasing identical goods. The seller will no longer be required to collect TCS on products supplied as a result of the repeal of Section 206C(1H) on April 1, 2025.
3. Reduced TCS Rates for Forest Produces
Section 206C(1) has lowered the TCS rate for wood and other forest products, excluding tendu leaves, from the prior cap of 2.5% to 2%. Furthermore, the definition of "forest produce" will be identical to that found in any State Act or the Indian Forest Act of 1927.
Conclusion
Overall, Form GST REG-07 is vital for any person responsible for TDS or TCS compliance under GST. It streamlines the GST registration process for public sector entities, government bodies, and e-commerce platforms.
Timely filing of this form on the common portal not only ensures registration compliance but also helps maintain business continuity and avoid penalties. Understanding recent regulatory changes and meeting all registration requirements is crucial for ensuring smooth and lawful operations under GST.
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FAQs
Who needs to file Form GST REG-07?
Who needs Form GST REG-07 must be filed by government departments, public sector undertakings, local authorities, and e-commerce operators required to deduct TDS or collect TCS under GST. Specifically, entities covered under Sections 51 (TDS) and 52 (TCS) of the CGST Act must register via this form before starting operations. This ensures they remain compliant with GST norms and avoid penalties.to file Form GST REG-07?
What happens if I don't register for GST TDS/TCS on time?
Failing to register for GST TDS or TCS timely can lead to legal complications, penalties, and disruption in your business operations. Non-compliance may attract penalties as per GST provisions, including financial fines and possible legal actions. Additionally, the inability to issue GST-compliant invoices or collect/deduct tax impacts your credibility and may disrupt your business continuity.
Are there any recent changes in TCS rules under GST?
Yes, recent amendments include an increased TCS threshold from Rs. 7 lakhs to Rs. 10 lakhs for international remittances and travel packages under LRS. TCS provisions on the sale of goods exceeding Rs. 50 lakhs have been removed to resolve conflicts with existing TDS provisions. Also, TCS rates on certain forest produce have been reduced, simplifying compliance.
What documents are essential for GST registration via Form GST REG-07?
Important documents include PAN, Aadhaar card, proof of business registration, bank account details or cancelled cheque, business address proof, and identity and address proof of responsible individuals. Submitting complete and accurate documents ensures smooth processing and timely approval of your GST registration application.
When can GST registration get cancelled, and what are the consequences?
GST registration can be cancelled if the business is discontinued, transferred, or if the registered entity fails to comply with GST rules (such as non-filing of returns). Post-cancellation, the entity cannot legally collect GST or claim input tax credit. Continuing business operations after cancellation can result in severe legal consequences and hefty penalties under GST law.
Ankit Rahangdale is a seasoned finance professional with a distinguished background as a Chartered Accountant. Currently, he leads the Finance Department at Pice. With over five years of invaluable experience in the banking and finance sector, honing his expertise through esteemed institutions such as ICICI Bank and Standard Chartered Bank.
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