GST Payment of Tax

Q 1. What are the Payments to be made in GST regime?

Ans. In the GST regime, for any intra-state supply, taxes to
be paid are the Central GST (CGST), going into the account
of the Central Government) and the State/UT GST (SGST,
going into the account of the concerned State Government).
For any inter-state supply, 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). In addition,
wherever applicable, Interest, Penalty, Fees and any other
payment will also be required to be made.

Q 2. Who is liable to pay GST?

Ans. In general, the supplier of goods or services is liable to
pay GST. However, in specified cases like imports and other
notified supplies, the liability may be cast on the recipient
under the reverse charge mechanism. Further, 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. Also Government
Departments making payments to vendors above a specified
limit [2.5 lakh under one contract as per S.51(1)(d)] are
required to deduct tax (TDS) and 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.

Q 3. When does liability to pay GST arises?

Ans. 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 Section 13.

The time is generally the earliest of one of the three events,
namely receiving payment, issuance of invoice or
completion of supply. Different situations envisaged and
different tax points have been explained in the aforesaid
sections.

Q 4. What are the main features of GST payment process?

Ans. The payment processes under GST Act(s) have the
following features:

  • Electronically generated challan from GSTN
    Common Portal in all modes of payment and no use of
    manually prepared challan;

  • Facilitation for the tax payer by providing hassle
    free, anytime, anywhere mode of payment of tax;

  • Convenience of making payment online;

  • Logical tax collection data in electronic format;

  • Faster remittance of tax revenue to the Government
    Account;

  • Paperless transactions;

  • Speedy Accounting and reporting;

  • Electronic reconciliation of all receipts;

  • Simplified procedure for banks

  • Warehousing of Digital Challan.

Q 5. How can payment be done?

Ans. Payment can be done by the following methods:

(i) Through debit of Credit Ledger of the tax payer
maintained on the Common Portal – ONLY Tax can be paid.
Interest, Penalty and Fees cannot be paid by debit in the
credit ledger. Tax payers shall be allowed to take credit of
taxes paid on inputs (input tax credit) and utilize the same
for payment of output tax. However, no input tax credit on
account of CGST shall be utilized towards payment of SGST
and vice versa. The credit of IGST would be permitted to be
utilized for payment of IGST, CGST and SGST in that order.

(ii) In cash by debit in the Cash Ledger of the tax payer
maintained on the Common Portal. Money can be deposited
in the Cash Ledger by different modes, namely, E-Payment
(Internet Banking, Credit Card, Debit Card); Real Time
Gross Settlement (RTGS)/ National Electronic Fund
Transfer (NEFT); Over the Counter Payment in branches of
Banks Authorized to accept deposit of GST.

Q 6. When is payment of taxes to be made by the Supplier?

Ans. Payment of taxes by the normal tax payer is to be done
on monthly basis by the 20th of the succeeding month. Cash
payments will be first deposited in the 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. As mentioned earlier, payment
can also be debited from the Credit Ledger. Payment of
taxes for the month of March shall be paid by the 20th of
April. Composition tax payers will need to pay tax on
quarterly basis.

Q 7. Whether time limit for payment of tax can be extended or paid in monthly installments?

Ans. No, this is not permitted in case of self-assessed
liability. In other cases, competent authority has been
empowered to extend the time period or allow payment in
instalments. (Section 80 of the CGST/SGST Act).

Q 8. What happens if the taxable person files the return but does not make payment of tax?

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 9. 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?

Ans. It is the date of credit to the Government account.

Q 10. What are E-Ledgers?

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 11. What is a tax liability register?

Ans. Tax Liability Register will reflect the total tax liability
of a taxpayer (after netting) for the particular month.

Q 12. What is a Cash Ledger?

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 13. What is an ITC Ledger?

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 14. What is the linkage between GSTN and the authorized Banks?

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 15. Can a tax payer generate challan in multiple sittings?

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 16. Can a challan generated online be modified?

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 17. Is there a validity period of challan?

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 18. What is a CPIN?

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 19. What is a CIN and what is its relevance?

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 20. What is the sequence of payment of tax where that taxpayer has liabilities for previous months also?

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 21. What does the expression “Other dues” referred to above mean?

Ans. The expression “other dues” means interest, penalty,
fee or any other amount payable under the Act or the
rules made thereunder.

Q 22. What is an E-FPB?

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 E-
FPB.

For NEFT/RTGS Transactions, RBI will act as E-FPB.

Q 23. What is TDS?

Ans. TDS stands for Tax Deducted at Source (TDS). As
per section 51, this provision is meant for Government
and Government undertakings and other notified
entities making contractual payments where total
value of such supply under a contract
exceeds Rs. 2.5 Lakhs to suppliers. While making any payments under such contracts, the concerned
Government/authority shall deduct 1% of the total
payment made and remit it into the appropriate GST
account.

Q 24. How will the Supplier account for this TDS? while filing his return?

Ans. Any amount shown as TDS will be reflected in the
electronic cash ledger of the concerned supplier. He can
utilize this amount towards discharging his liability
towards tax, interest fees and any other amount.

Q 25. How will the TDS Deductor account for such TDS?

Ans. TDS Deductor will account for such TDS in the
following ways:

(1) Such deductors needs to get compulsorily registered
under section 24 of the CGST/SGST Act.

(2) They need to remit such TDS collected by the 10th
day of the month succeeding the month in which TDS
was collected and reported in GSTR 7.

(3) The amount deposited as TDS will be reflected in the
electronic cash ledger of the supplier.

(4) They need to issue certificate of such TDS to the
deductee within 5 days of crediting the TDS to the
govt a/c, failing which fees of Rs. 100 per day subject
to maximum of Rs. 5000/- will be payable by such
deductor.

Q 26. What is Tax Collected at Source (TCS)?

Ans. This provision is applicable only for E-Commerce
Operator under section 52 of CGST/SGST Act. Every E-
Commerce Operator, not being an agent, needs to
withhold an amount calculated at the rate not exceeding
one percent of the “net value of taxable supplies” made
through it where the consideration with respect to such
supplies is to be collected by the operator. Such withheld
amount is to be deposited by such E-Commerce Operator
to the appropriate GST account by the 10th of the next
month. The amount deposited as TCS will be reflected in
the electronic cash ledger of the supplier.

Q 27. What does the expression “Net value of taxable supplies” mean?

Ans. The expression “net value of taxable supplies” means
the aggregate value of taxable supplies of goods or
services, other than services notified under Section 9(5),
made during any month by all registered taxable persons
through the operator reduced by the aggregate value of
taxable supplies returned to the suppliers during the said
month.

Q 28. Is the pre-registration of credit card necessary in the GSTN portal for the GST payment?

Ans. Yes. The taxpayer would be required to pre-register
his credit card, from which the tax payment is intended,
with the Common Portal maintained on GSTN. GSTN may
also attempt to put in a system with banks in getting the
credit card verified by taking a confirmation from the
credit card service provider. The payments using credit
cards can therefore be allowed without any monetary limit
to facilitate ease of doing business.

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