Table of Contents
1. Types of Payments to be made in GST Regime
| For any intra-state supply | For any interstate supply |
| Taxes to be paid are:
— Central Tax known as the Central GST (CGST), going into the account of the Central Government and — State/UT Tax known as the SGST/UTGST, going into the account of the concerned State Government or Union Territory as the case may be. |
Tax to be paid is Integrated GST (IGST) which will have components of both CGST and SGST. |
In addition, certain categories of registered persons will be required to pay to the government account Tax Deducted at Source (TDS) and Tax Collected at Source (TCS).
Further, interest, penalty, fees and any other payment wherever applicable will also be required to be made.
2. Who liable to pay GST?
The following persons are liable to pay GST:
(1) In general, the supplier of goods or services is liable to pay GST.
(2) In specified cases like imports and other notified supplies, the liability may be cast on the recipient under the reverse charge mechanism.
(3) In some notified cases of intra-state supply of services, the liability to pay GST may be cast on e-commerce operators through which such services are supplied.
(4) Government Departments making payments to vendors above a specified limit of Rs. 2.5 lakh under one contract as per Section 51(1)(d) are required to deduct tax (TDS).
(5) E-Commerce operators are required to collect tax (TCS) on the net value [i.e. aggregate value of taxable supplies of goods and/or services but excluding such value of services on which the operator is made liable to pay GST under section 9(5) of the CGST Act, 2017] of supplies made through them and deposit it with the Government.
3. When does liability to pay GST arises?
Liability to pay arises at the time of supply of Goods as explained in Section 12 and at the time of supply of services as explained in Section13.
The time is generally the earliest of one of the three events, namely :-
(i) Receiving Payment,
(ii) Issuance of Invoice Or
(iii) Completion of Supply.
Example:
(a) Date of invoice 15th May 2018
(b) Date of receipt of payment 10th July 2018
(c) Date when supplier recorded receipt in books 11th July 2018
Time of supply will be 15th May 2018
4. E-Ledger / Register under GST Scheme
Under the GST scheme, Electronic Ledgers have been introduced. There are two Electronic Ledgers or E-Ledgers namely Electronic Cash Ledger (ECL) and Electronic Credit Ledger (ECrL) in respect of each Registered Taxpayer.
> Electronic cash ledger (ECL) is a statement of cash in respect of each registered tax payer.
> Electronic credit ledger (ECrL) is a statement of input tax credit in respect of each registered tax payer.
In addition, each taxpayer shall also have an electronic tax liability register.
> Electronic Tax Liability Register will reflect the total tax liability of a taxpayer (after netting) for the particular month.
Once a taxpayer is registered on common portal (GSTN), two e-ledgers (Cash & Input Tax Credit ledger) and an Electronic Tax Liability Register will be automatically opened and displayed on his dash board at all times.
5. Payment of GST, Interest, Penalty and other Amounts
Payment of GST can be done by the following methods:
(1) Electronic Cash Ledger (ECL) [Section 49(1) & (3)]
(i) Money can be deposited in the Cash Ledger by generating a challan in Form GST PMT-06 on the common portal by different modes, namely, E-Payment (Internet Banking, Credit Card, Debit Card); Real Time Gross Settlement (RTGS)/National Electronic Fund Transfer (NEFT); and
Over the Counter Payment in branches of Banks Authorized to accept deposit of GST upto Rs. 10,000 per challan per tax period by cash, cheque or demand draft.
Any payment required to be made by a person who is not registered under the Act, shall be made on the basis of a temporary identification number generated through the common portal.
(ii) The above deposit of money will be credited to the ECL of the taxable person. This ledger shall be maintained in Form GST PMT-05.
Further, tax deducted under section 51 and collected under section 52 from the registered person shall also be credited to the electronic ledger.
(iii) Date of credit into the account of the Government is deemed to be the date of deposit (not the actual date of debit to the account of the taxable person).
(iv) Money deposited in ECL can be used for making any payment towards tax, interest, penalty, fee or any other amount payable by a taxable person.
(2) Electronic Credit Ledger (ECrL) [Section 49(2) & (4)]
(i) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger (ECrL), in accordance with section 41 i.e. provisionally, to be maintained in such manner as may be prescribed.
(ii) ECrL shall be maintained in Form GST PMT-02 for each registered person eligible for input tax credit under the Act on the Common Portal and every claim of input tax credit under the Act shall be credited to the said Ledger.
(iii) The amount available in the electronic credit ledger may be used for making any payment towards output tax under the provisions of the CGST Act or the IGST Act. Only tax can be paid through ECrL. Interest, Penalty and Fees cannot be paid by debit in the RCrL.
(iv) A registered person shall, upon noticing any discrepancy in his electronic credit ledger, communicate the same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04.
(3) Electronic Liability Ledger
All liabilities of a taxable person under GST shall be recorded and maintained in electronic liability ledger in Form GST PMT-01. It shall be maintained for each person liable to pay tax, interest, penalty, late fee or any other amount on the common portal and all amounts payable by him shall be debited to the said register.
>> The Electronic Liability Register of the person shall be debited by—
a. The amount payable towards tax, interest, late fee or any other amount payable as per the return furnished by the said person;
b. The amount of tax, interest, penalty or any other amount payable as determined by a proper officer in pursuance of any proceedings under the Act or as ascertained by the said person;
c. The amount of tax and interest payable as a result of mismatch under section 42 or section 43 or section 50; or
d. Any amount of interest that may accrue from time to time.
>> Payment of every liability by a registered person as per his return shall be made by debiting the electronic credit ledger or the electronic cash ledger and the electronic liability register shall be credited accordingly.
>> The amount of TDS/TCS or amount payable on reverse charge basis, or the amount payable by a Composition Scheme dealer, any amount payable towards interest, penalty, fee or any other amount under the Act shall be paid by debiting the electronic cash ledger and the electronic liability register shall be credited accordingly.
>> Any amount of demand debited in the electronic liability register shall stand reduced to the extent of relief given by the appellate authority or Appellate Tribunal or court and the electronic tax liability register shall be credited accordingly.
>> The amount of penalty imposed or liable to be imposed shall stand reduced partly or fully, as the case may be, if the taxable person makes the payment of tax, interest and penalty specified in the show cause notice or demand order and the electronic liability register shall be credited accordingly.
>> A registered person shall, upon noticing any discrepancy in his electronic liability ledger, communicate the same to the officer exercising jurisdiction in the matter, through the common portal in Form GST PMT-04.
(4) Time of payment of GST by the Supplier
Payment of GST by the normal tax payer is to be done on monthly basis by the 20th of the succeeding month. Money will be first deposited in the Electronic Cash Ledger and the tax payer shall debit the ledger while making payment in the monthly returns and shall reflect the relevant debit entry number in his return.
Further, payment can also be debited from the Electronic Credit Ledger.
However, composition tax payers will need to pay GST on quarterly basis.
As per section 39(7), every registered person, who is required to furnish a return under section 39(1) or section 39(2) or section 39(3) or section 39(5), shall pay to the Government the GST due as per such return not later than the last date on which he is required to furnish such return.
Thus, the due dates for payment of GST for different registered persons are as under:
| Sl.No. | Registered Person (RP) | Due date of payment of GST | Section of the CGST Act / SGST Act |
| A. | Any registered person other than mentioned below | 20th of the month following the calendar month | Section 39(1) |
| B. | Registered person paying GST under Composition Levy Scheme | 18th of the month following the quarter | Section 39(2) |
| C. | Registered person required to deduct tax at source | 10th of the month following the month in which such deductions have been made | Section 39(3) |
| D. | Every registered non-resident taxable person | Earlier of the following dates:
(i) 20th of the month following the end of the calendar month; or (ii) 7 days after the last day of the period of registration Note.— Advance deposit of GST [Section 27(2)]: A non-resident taxable person (NRTP), at the time of submission of application for registration under section 25(1), also makes an advance deposit of GST in an amount equivalent to the estimated GST liability of such person for the period for which the registration is sought: The advance amount so deposited shall be credited to the electronic cash ledger of such person and shall be utilised in the manner provided under section 49. |
Section 39(5) |
| Every Electronic Commerce Operator [ECO] collecting tax at source | 10th of the month following the month in which such collection is made | Section 52(3) |
6. Order of utilization of ITC Available in the Electronic Credit Ledger [Section 49(5)]
The following will be the order in which the input tax credit available in the electronic credit ledger shall be utilized for tax payment:
| Input tax credit on account of IGST | Input tax credit on account of CGST | Input tax credit on account of SGST/UTGST |
| First for payment of IGST | First for payment of CGST | First for payment of SGST/UTGST |
| Then for payment of CGST | Then for payment of IGST | Then for payment of IGST |
| And then if balance is there, for payment of SGST or UTGST | In case there is further balance it shall not be utilized for payment of SGST/UTGST | In case there is further balance if shall not be utilized for payment of CGST |
Example-1 :
R has a sum of Rs. 2,80,000 on account of input tax credit of CGST in the electronic credit ledger. He has to pay the following tax liability:
| Tax payable under | Amount (Rs.) |
| (i) IGST | 1,10,000 |
| (ii) SGST / UTGST | 80,000 |
| (iii) CGST | 1,50,000 |
Determine the order of utilization of the ITC available in electronic credit ledger.
Solution :
Out of input tax credit of CGST of Rs. 2,80,000 lying credited in electronic credit ledger, R shall first use Rs. 1,50,000 for the payment of CGST.
Thereafter, he will use the balance, if any, for payment of IGST amounting to Rs. 1,10,000.
If there is still some balance in the electronic credit ledger, it cannot be used for payment of SGST/UTGST.
Example-2:
R has a sum of Rs. 3,60,000 on account of input tax credit of SGST in the electronic credit ledger. He has to pay the following tax liability:
| Tax payable under | Amount (Rs.) |
| (i) IGST | 1,40,000 |
| (ii) SGST / UTGST | 1,80,000 |
| (iii) CGST | 1,70,000 |
Determine the order of utilization of the ITC available in electronic credit ledger.
Solution :
Out of input tax credit of Rs. 3,60,000 lying credited in electronic credit ledger, R shall first use Rs. 1,80,000 for the payment of SGST/UTGST.
Thereafter, he will use the balance, if any, for payment of IGST amounting to Rs. 1,40,000.
If there is still some balance in the electronic credit ledger, it cannot be used for payment of CGST.
Example-3:
R has a sum of Rs. 3,90,000 on account of input tax credit of IGST in the electronic credit ledger. He has to pay the following tax liability:
| Tax payable under | Amount (Rs.) |
| (i) IGST | 2,10,000 |
| (ii) SGST / UTGST | 1,80,000 |
| (iii) CGST | 1,40,000 |
Determine the order of utilization of the ITC available in electronic credit ledger.
Solution:
Out of input tax credit of IGST of Rs. 3,90,000 lying credited in electronic credit ledger, R shall first use Rs. 2,10,000 for the payment of IGST.
Thereafter, he will use the balance, if any, for payment of CGST amounting to Rs. 1,40,000.
If there is still some balance in the electronic credit ledger, it will be used for payment of SGST / UTGST.
Hence, he can use the balance of Rs. 40,000 towards the payment of SGST / UTGST.
7. Refund of the Amount Available in Electronic Cash Ledger (ECL) or Electronic Credit Ledger (ECrL) [Section 49(6)]
After payment of tax, interest, penalty, fee or any other amount payable under the Act or the rules made there under, the balance amount available in ECL or ECrL may be refunded in accordance with the provisions of section 54.
8.Electronic Liability Register (ELR) to be maintained in Form GST PMT-01 for recording all liabilities [Section 49(7)]
All liabilities of a taxable person under this Act shall be recorded and maintained in an Electronic Liability Register in FORM GST PMT-01 for each person liable to pay tax, interest, penalty, late fee or any other amount. Further, the said register shall be maintained on the Common Portal and all amounts payable by a taxable person shall be debited to the said register.
9. Order of Discharge of GST and Other Dues [Section 49(8)]
Every taxable person shall discharge his tax and other dues (interest, penalty, fee or any other amount payable) in the following order:—
(a) self-assessed tax, and other dues related to returns of previous tax periods;
(b) self-assessed tax, and other dues related to the return of the current tax period;
(c) any other amount payable under this Act or the rules made there under including the demand determined under section 73 or section 74.
| Section 73 or section 74 deal with the following:
Section 73 : Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any willful misstatement or suppression of facts Section 74 : Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any willful misstatement or suppression of facts |
10. Passing on the Full Incidence of CGST/SGST/IGST [Section 49(9) of the CGST Act, 2017]
Every person who has paid the tax on goods or services or both under the CGST Act/SGST Act/IGST Act shall be deemed to have passed on the full incidence of such tax to the recipient of such goods or services or both.
11. Interest on delayed payment of GST [Section 50 of the CGST Act, 2017]
Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made there under, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding 18%, as may be notified by the Government on the recommendations of the Council.
Further, a taxable person who makes an undue or excess claim of input tax credit under section 42(10) or undue or excess reduction in output tax liability under section 43(10), shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not exceeding 24%, as may be notified by the Government on the recommendations of the Council.
12. When Interest is Applicable under GST
Interest is applicable in the following cases –
| Section | Different situations | Rate of interest |
| 50(1) | A person who is liable to pay tax (in accordance with different provisions under GST) fails to pay the tax (or part thereof) to the Government within the prescribed period | 18% |
| 50(3) | A taxable person who makes an undue or excess claim of input tax credit under section 42(10) or undue reduction in output tax under section 43(10) | 24% |
| 54(12) | Where a refund is withheld, a taxable person shall be entitled to interest if as a result of an appeal (or further proceedings) he becomes entitled to refund | 6% |
| 56 | If any tax ordered to be refunded is not refunded within 60 days of the refund application made by the taxpayer, interest will be paid by Government | 6% |
| 56, Proviso | Where any claim of refund arises from an appellate order (which has attained finality) and the same is not refunded within 60 days from the date of receipt of application filed consequent to such order, interest will be paid by the Government after the expiry of 60 days | 9% |
13. When A Person is Liable for Penalty Under GST
The incidence of short payment of tax (or erroneous refund or wrong availment of input tax credit) may be because of the following reasons –
– Normal cases – An inadvertent bona fide mistake.
– Fraud cases – It may be a deliberate attempt to evade the tax.
In these two cases, nature of offence is totally different. Consequently, separate provisions for recovery of the tax and levy of penalty have been made. Moreover, there are provisions to encourage voluntary compliance such as no penalty (or lesser penalty) if the due tax (along with interest) is paid within the specified time limit.
The table below summarises these provisions –
| Action by taxpayer | Quantum of Penalty | |
| Normal cases | Fraud cases | |
| Tax (along with interest) paid before issue of notice | No penalty and no notice shall be issued | 15% of tax and no notice shall be issued |
| Tax (along with interest) paid within30 days of issue of notice | No penalty (all proceedings deemed to be concluded) | 25% of the tax (all proceedings deemed to be concluded) |
| Tax (along with interest) paid within 30 days of communication of order | 10% of the tax or Rs. 10,000, whichever is higher – | 50% of the tax (all proceedings deemed to be concluded) |
| Tax (along with the interest) paid after 30 days of communication of | 10% of the tax or Rs. 10,000, whichever is higher | 100% of the tax |
Order Note –
No penalty is levied in cases where the self-assessed tax (or any amount collected as tax) is paid (with interest) within 30 days from the due date of payment.
Time for issue of notice and making order –
Time-limit for issue of notice and issue of order pertaining to penalty is as follows –
| Different cases | Time-limit for issue of notice | Time-limit for issue of order |
| Normal cases | Within 2 years and 9 months from the due date of filing annual return for the financial year to which the demand pertains or from the date of erroneous refund | Within 3 years from the due date of filing of annual return for the financial year to which the demand pertains or from the date of erroneous refund |
| Fraud cases | Within 4 years and 6 months from the due date of filing annual return for the financial year to which the demand pertains or from the date of erroneous refund | Within 5 years from the due date of filing of annual return for the financial year to which the demand pertains or from the date of erroneous refund |
| Amount collected as tax but not paid | No time-limit | Within one year from the date of issue of notice |
| Non-payment of self-assessed tax | No need to issue a show cause notice | Recovery proceedings can be started directly |
FAQ’s on GST Payment released by CBEC on 31.3.2017
Q 1. What happens if the taxable person files the return but does not make payment of tax? [Question No. 8 of FAQ’s]
Ans. In such cases, the return is not considered as a valid return. Section 2(117) defines a valid return to mean a return furnished under sub-section (1) of section 39 on which self-assessed tax has been paid in full. It is only the valid return that would be used for allowing input tax credit (ITC) to the recipient. In other words, unless the supplier has paid the entire self-assessed tax and filed his return and the recipient has filed his return, the ITC of the recipient would not be confirmed.
Q 2. Which date is considered as date of deposit of the tax dues – Date of presentation of cheque or Date of payment or Date of credit of amount in the account of government? [Question No. 9 of FAQ’s]
Ans. It is the date of credit to the Government account.
Q 3. What are E-Ledgers? [Question No. 10 of FAQ’s]
Ans. Electronic Ledgers or E-Ledgers are statements of cash and input tax credit in respect of each registered taxpayer. In addition, each taxpayer shall also have an electronic tax liability register. Once a taxpayer is registered on Common Portal (GSTN), two e-ledgers (Cash &Input Tax Credit ledger) and an electronic tax liability register will be automatically opened and displayed on his dash board at all times.
Q 4. What is a tax liability register? [Question No. 11 of FAQ’s]
Ans. Tax Liability Register will reflect the total tax liability of a taxpayer (after netting) for the particular month.
Q 5. What is a Cash Ledger? [Question No. 12 of FAQ’s]
Ans. The cash ledger will reflect all deposits made in cash, and TDS/TCS made on account of the taxpayer. The information will be reflected on real time basis. This ledger can be used for making any payment on account of GST.
Q 6. What is an ITC Ledger? [Question No. 13 of FAQ’s]
Ans. Input Tax Credit as self-assessed in monthly returns will be reflected in the ITC Ledger. The credit in this ledger can be used to make payment of TAX ONLY and not other amounts such as interest, penalty, fees etc.
Q 7. What is the linkage between GSTN and the authorized Banks? [Question No. 14 of FAQ’s]
Ans. There will be real time two-way linkage between the GSTN and the Core Banking Solution (CBS) of the Bank. CPIN is automatically routed to the Bank via electronic string for verification and receiving payment and a challan identification number (CIN) is automatically sent by the Bank to the Common Portal confirming payment receipt. No manual intervention will be involved in the process by any one including bank cashier or teller or the tax payer.
Q 8. Can a tax payer generate challan in multiple sittings? [Question No. 15 of FAQ’s]
Ans. Yes, a taxpayer can partially fill in the challan form and temporarily “save” the challan for completion at a later stage. A saved challan can be “edited” before finalization. After the tax payer has finalized the challan, he will generate the challan, for use of payment of taxes. The remitter will have option of printing the challan for his record.
Q 9. Can a challan generated online be modified? [Question No. 16 of FAQ’s]
Ans. No. After logging into GSTN portal for generation of challan, payment particulars have to be fed in by the tax payer or his authorized person. He can save the challan midway for future updation. However once the challan is finalized and CPIN generated, no further changes can be made to it by the taxpayer.
Q 10. Is there a validity period of challan? [Question No. 17 of FAQ’s]
Ans. Yes, a challan will be valid for fifteen days after its generation and thereafter it will be purged from the System. However, the tax payer can generate another challan at his convenience.
Q 11. What is a CPIN? [Question No. 18 of FAQ’s]
Ans. CPIN stands for Common Portal Identification Number (CPIN) given at the time of generation of challan. It is a 14-digit unique number to identify the challan. As stated above, the CPIN remains valid for a period of 15 days.
Q 12. What is a CIN and what is its relevance? [Question No. 19 of FAQ’s]
Ans. CIN stands for Challan Identification Number. It is a 17-digit number that is 14-digit CPIN plus 3-digit Bank Code. CIN is generated by the authorized banks/ Reserve Bank of India (RBI) when payment is actually received by such authorized banks or RBI and credited in the relevant government account held with them. It is an indication that the payment has been realized and credited to the appropriate government account. CIN is communicated by the authorized bank to taxpayer as well as to GSTN.
Q 13. What is the sequence of payment of tax where that taxpayer has liabilities for previous months also? [Question No. 20 of FAQ’s]
Ans. Section 49(8) prescribes an order of payment where the taxpayer has tax liability beyond the current return period. In such a situation, the order of payment to be followed is: First self-assessed tax and other dues for the previous period; thereafter self-assessed tax and other dues for the current period; and thereafter any other amounts payable including any confirmed demands under section 73 or 74. This sequence has to be mandatorily followed.
Q 14. What does the expression “Other dues” referred to above mean? [Question No. 21 of FAQ’s]
Ans. The expression “other dues” means interest, penalty, fee or any other amount payable under the Act or the rules made thereunder.
Q 15. What is an E-FPB? [Question No. 22 of FAQ’s]
Ans. E-FPB stands for Electronic Focal Point Branch. These are branches of authorized banks which are authorized to collect payment of GST. Each authorized bank will nominate only one branch as its E-FPB for pan India Transactions. The E-FPB will have to open accounts under each major head for all governments. Total 38 accounts (one each for CGST, IGST and one each for SGST for each State/UT Govt.) will have to be opened. Any amount received by such E-FPB towards GST will be credited to the appropriate account held by such EFPB.