Ease in making payment towards tax and other dues is very important in a country like India. Challenge before the Empowered Committee was to usher in a mechanism of payment which is user friendly and at the same time allows payment through various modes, after utilization of ITC. A seamless payment mechanism has been envisaged.
2. It is noted that under GST regime, some taxes and duties may remain outside the purview of GST and will continue to be collected in the manner prescribed under existing accounting procedures/rules/manuals, etc. This means that two types of challans (one for GST and other for non-GST) will be used and accounted for by the respective Pay and Accounts Offices (PA0s)/State AGs.
3. The payment processes under proposed GST regime have the following features:
a) Electronically generated challan from GSTN Common Portal in all modes of payment and no use of manually prepared challan;
b) Facilitation for the taxpayer by providing hassle free, anytime, anywhere mode of payment of tax;
c) Convenience of making payment online;
d) Logical tax collection data in electronic format;
e) Faster remittance of tax revenue to the Government Account;
f ) Paperless transactions;
g) Speedy Accounting and reporting;
h) Electronic reconciliation of all receipts;
i) Simplified procedure for banks;
j) Warehousing of Digital Challan.
Mode of Payment:
4. As per section 35 (1) of the Act, every deposit made towards tax, interest, penalty, fee or any other amount shall be credited to the electronic cash ledger of a taxable person by:
i. internet banking or by using credit/debit cards or
ii. National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) or
iii. any other mode,
Conditions and restrictions with respect to mode of payment and the manner shall be prescribed in the rules.
What is the meaning tax?
As per section 2 (94) of the Act, tax means goods and services tax levied on the supply of
goods and/or services under this Act and includes any amount payable under section 8.
5. date of deposit :
As per the explanation to section 35 (1) of the Act, the date of credit to the account of the appropriate Government in the authorized bank shall be deemed to be the date of deposit.
Maintenance of electronic ledgers:
6. These are running electronic ledgers maintained on the dashboard of a taxpayer by GSTN). These would be updated in real time on an activity in connection with these ledgers by the taxpayer. Both the ITC ledger and the cash ledger will be utilized by the taxpayer for discharging the tax liabilities of the returns and others. Details in these ledgers will get auto populated from previous tax period returns (irrespective of mode of filing return i.e. online / offline utility)
7. Cash ledger: As per section 35 (1), any amount deposited to the account of the concerned Government (CGST, SGST, IGST and additional tax) shall be credited to the electronic cash ledger of such person.
8. ITC ledger: As per section 35 (2), ITC as self-assessed in the return shall be credited to his electronic credit ledger in the first instance. It will have details on ITC claimed & utilized for CGST, SGST & IGST.
9. Tax Liability ledger: As per section 35 (7) of the act, liabilities of a taxable person in form of tax, interest, fee & penalty towards CGST, SGST & IGST is recorded and maintained in this ledger.
Rules for Utilization of Amount in Electronic Ledger:
10. Utilization of amount in cash ledger: As per section 35 (3) of the 10act, amount
available in the electronic cash ledger may be used for making any payment towards:
♦ tax,
♦ interest,
♦ penalty,
♦ Fees,
♦ any other amount payable
11. Utilization of amount in credit ledger: As per section 35 (4) of the act, amount
available in the electronic credit ledger may be used for making any payment towards:
♦ making any payment towards tax.
ITC Utilization Rules
12. ITC Utilization shall be made in the following order:
12.1 As per Section 35 (5) (a) of the act, the amount of input tax credit on account of IGST available in the electronic credit ledger shall
(a) first be utilized towards payment of IGST liability
(b) IGST credit, if available, may be utilized towards payment of CGST liability
(c) IGST credit, if available, may be utilized towards payment of SGST liability
12.2 As per section 35 (5) (b) in CGST act, the amount of input tax credit on account of CGST available in the electronic credit ledger shall:
(a) first be utilized towards payment of CGST liability
(b) CGST credit, if available, to set-off IGST liability, if any
12.3 As per section 35 (5) (b) in SGST Act, the amount of input tax credit on account of SGST available in the electronic credit ledger shall:
(a) first be utilized towards payment of SGST liability
(b) SGST credit, if available, to set-off IGST liability, if any
12.4 As per section 35 (5) (c) of the act, cross utilization of credit between CGST & SGST shall not be permitted.
Refund of Balance Amount in Electronic Ledger
13. As per section 35 (6) of the act, the balance in the cash or credit ledger after payment of tax, interest, penalty, fee or any other amount payable under the Act/the rules may be refunded in accordance with the provisions of section 38 and the amount collected as CGST/SGST shall stand reduced to that extent.
Rules for Discharging Liability
As per section 35 (8) of the act, the taxable person shall discharge his tax and other dues 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 return of current tax period;
(c) any other amount payable under the Act / the rules including the demand determined under section 51.
15. As per section 35 (9) of the act, person who has paid the tax shall unless the contrary is proved be deemed to have passed on the full incidence of such tax to the recipient.
Provision of Interest on Delayed Payment of Tax
16. As per section 36 (1) of the act, interest shall be payable at a specified rate in case where a person, who fails to pay the tax or any part thereof for the period for which the tax or any part thereof remains unpaid. Rate of interest shall be notified by the Central or a State Government on the recommendation of the Council.
17. As per section 36 (2) of the act, interest shall be calculated from the first day such tax was due to be paid.
18. As per section 36 (3) of the act, interest at the prescribed rate shall be payable in case where taxable person makes an undue or excess claim of ITC under section 29 (10) on such undue or excess claim. Manner for computation of interest shall be prescribed in the rules.
Provisions of TDS
19. Who can be the deductor: As per section 37 (1) of the act, the deductor can be:
(a) a department or establishment of the Central or State Government, or
(b) Local authority, or
(c) Governmental agencies, or
(d) such persons or category of persons as may be notified, by the Central or a State Government on the recommendations of the Council,
20. Rate of TDS: The deductor is required to deduct tax at rate of 1% from the payment made or credited to the supplier of taxable goods and/or services, notified by the Central or a State Government on the recommendations of the Council.
21. Value of supply for TDS: The deductor is required to deduct tax where total value of supply under a contract exceeds Rs. 10 lakh. As per the explanation to section 37 (1), for the purpose of deduction of tax, the value of supply shall be taken as the amount excluding the tax indicated in the invoice.
22. Time-limit for Payment: As per section 37 (2) of the act, the deductor shall be required to pay the amount deducted as tax within ten days after the end of the month in which such deduction is made. Certificate to the deductee: As per section 37 (3) of the act, deductor shall be required to furnish to the deductee a certificate mentioning therein:
i. the contract value,
ii. rate of deduction,
iii. amount deducted,
iv. amount paid to the appropriate Government and
v. such particulars as may be prescribed in this behalf.
23. Time limit to furnish such certificate & penalty thereof: As per section 37 (4) of the act, if any deductor fails to furnish to the deductee the certificate, after deducting the TDS within five days of crediting the amount so deducted to the appropriate Government, the deductor shall be liable to pay, by way of a late fee, a sum of Rs. 100/- per day from the day after the expiry of the five day period until the failure is rectified. However, the amount of fee shall not exceed Rs 5,000/-.
24. Claiming credit of TDS: Deductor is required to file the return and has to provide the detail of amount of TDS in his return. When deductor pays the amount of TDS, it shall get reflected into the credit ledger of the deductee. As per section 37 (5)of the act, the deductee shall claim credit, in his electronic cash ledger, of the tax deducted by the deductor.
25. Interest liability on deductor: As per section 37 (6) of the act, if any deductor fails to pay the amount of TDS to the credit of the appropriate Government, he shall be liable to pay interest in accordance with the provisions of section 36, in addition to the amount of TDS.
Transitional Provisions on Recovery, etc:
26. Finalization of proceedings relating to output duty liability: As per section 156 (1) of the act, every proceeding of appeal, revision, review or reference relating to any output duty liability initiated before the implementation of GST, shall be disposed of in accordance with the provisions of the earlier law, and if any amount becomes recoverable as a result of such appeal, revision, review or reference, the same shall be recovered as an arrear of tax under this Act.
27. Treatment of the amount recovered or refunded in pursuance of assessment or adjudication proceedings: As per section 157 (1) of the act, where in pursuance of an assessment or adjudication proceedings instituted, whether before or after the implementation of GST, under the earlier law, any amount of tax, interest, fine or penalty becomes recoverable from the taxable person, the same shall be recovered as an arrear of tax under this Act.
28. Treatment of the amount recovered or refunded pursuant to revision of returns: As per section 158 (1) of the act, where any return, furnished under the earlier law, is revised and if, pursuant to such revision, any amount is found to be recoverable from the taxable person, the same shall be recovered as an arrear of tax under this Act.
Details of three modes of payment: Abstracts from the report of Business Process for GST on GST Payment Process as approved by the Empowered Committee (It may be noted that the rules are yet to be finalized):
29. The following three modes of payment are proposed:
a) Payment by taxpayers through Internet Banking through authorized banks and through credit card/debit card;
Agency banks are permitted to both receive and make payments on behalf of the Government and therefore act as Banker to respective governments. However, authorized banks are only permitted to receive payment of GST on behalf of the Government, and keeping this distinction in view, the expression ‘authorized bank’ is used throughout this Document.
b) Over the Counter payment (OTC) through authorized banks;
c) Payment through NEFT/RTGS from any bank (including other than authorized banks).
I PAYMENT BY TAXPAYERS THROUGH INTERNET BANKING THROUGH AUTHORIZED BANKS AND THROUGH CREDIT CARD/ DEBIT CARD:
Process involved in e-payment of GST:
1. Every tax payer who wants to avail the facility of e-payment will access GSTN for generation of the Challan through which payment is to be made. The following methods for creation of draft challan for GST payments are recommended:
a) By Registered tax payer or his authorized person by logging on to GSTN Common Portal where basic details (such as name, address, email, mobile no. and GSTIN) of the tax payer will be auto populated in the challan;
b) By authorized representatives of tax payers by logging on to the GSTN Common Portal whereafter the list of registered taxpayers represented by him will be displayed. He can select any tax payer on whose behalf he proposes to pay GST and challan details for such tax payer will be auto populated;
c) By grant of temporary Registration number by any one Tax authority on GSTN Common Portal which can be used by both the tax authorities for facilitating tax payments on behalf of an unregistered person. Such a situation can arise during enforcement action by a tax authority and this temporary registration can be later converted into a regular registration number (GSTIN) if the tax payer has a regular GST liability to discharge after the enforcement action (detailed procedure described in Para 78 below);
d) By creation of a challan without requirement of USER ID and Password, for enabling payment of GST by a registered or an unregistered person on behalf of a taxpayer as per the directions of the tax authority using the GSTIN (like the present provision under Service tax). In this method, GSTN would provide for a validation check (like CAPTCHA) so that challan can be created by a person and not by machine.
2. Challans will not have details of jurisdictional authorities. The Tax authorities would send the Taxpayers updated master data to GSTN as well as to Accounting Authorities. The incremental changes in the said master would also be sent on real time basis by the Tax authorities to GSTN and Accounting authorities. As challan would not have a jurisdictional location code, the Accounting Authorities would use the TAXPAYER Master received from Tax authorities for mapping the challans with the Jurisdictional PAOs / tax authorities’ offices by having a suitable mapping mechanism.
3. The taxpayer will fill in the in draft challan details of the taxes that are to be paid. The tax payer will have the option to pay CGST, IGST, Additional Tax and SGST concurrently. The tax payers 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. The challan so generated will have a 14-digit (yymm followed by 10-digit) Unique Common Portal Identification Number (CPIN), assigned only when the challan is finally generated. After the challan is generated, it will be frozen and will not be allowed to be modified. The CPIN/challan so generated would be valid for a period of fifteen days. In case of payment through Mode III i.e. NEFT/RTGS, CPINs would remain live with RBI for a period of 30 days.
The system would purge all unused CPINs on the day immediately after the date on which the validity period is over (i.e. 15 days if Mode I or II is selected and 30 days if Mode III is selected for payment).
4. Since there are three modes of payment, the tax payer has to choose the e-payment mode. This mode will also cover payment by Credit/Debit Card which can be used only after log in on the GSTN.
5. Once e-payment mode is selected, options will be shown to taxpayer to choose between Internet Banking and Credit / Debit Cards for making payment. In case Internet Banking mode is selected, a field with drop down box detailing names of various authorized banks, registered with GSTN for Internet Banking, would be displayed.
6. In case of payment through Internet Banking, once the taxpayer chooses a particular bank for payment of taxes, GSTN will direct him to the website of the selected bank. Alongside, GSTN will forward an electronic string to the selected bank carrying the following details for each challan on real time basis:
a) GSTIN;
b) CPIN;
c) Challan Amount;
d) Break Up of the Amount into CGST, IGST, Additional Tax and SGST ;
e) State/UT Government to which SGST remittance pertains.
GSTN in consultation with banks would decide about the requirement of merchant code as a GSTN identifier.
7. Taxpayer will make the payment using the USER ID and Password provided by the bank to enter into the secured e- banking area of his bank. He will select an account for debiting the total tax amount and authorize the payment. While making the payment, the bank will display the breakup of total amount payable into CGST, IGST, Additional Tax and SGST and seek confirmation from the user. No change in the break up as well as the total amount would be allowed on the Bank’s portal. In case the user wants to change the break up or the total amount, he should abort the transaction and go back to GSTN portal from the bank’s portal and reinitiate the process.
8. After the successful completion of a transaction, e-FPB of the concerned bank will create a unique Challan Identification Number (CIN) against the CPIN. This will be a unique 17-digit number containing 14-digit CPIN generated by GSTN for a particular challan and unique 3-digit Bank code (MICR based which will be communicated by RBI to GSTN). This CIN, as a combination of CPIN and Bank Code, will be reported by the banks along with its own Unique Bank reference number (BRN). Such CIN is an indicator of successful transaction and will be used as a key field for accounting, reconciliation etc. by taxpayers, accounting authorities and tax authorities. After every successful e-payment transaction, there will be an instantaneous reverse flow of information through an electronic data string from the collecting bank to the GSTN containing the following details:
a) CIN;
b) GSTIN;
c) Bank Reference number (BRN);
[Since there could be maximum of four credits against one debit, banking practice may be ascertained by GSTN. If such transactions (i.e. four credits against one debit require multiple BRNs i.e. one for each credit entry), all BRNs should be reported.]
d) Challan amount;
e) Date of Payment;
f) Time of Payment
9. If the transaction cycle is not completed because of failure of credential verification, there would be no response from the bank to portal informing about the same. If a response (positive or negative) is not received by GSTN within the stipulated period (few minutes), there would be a feature in GSTN to re-ping the bank system and seek a response against CPIN. There may be a scenario in which the internet banking transaction is successful, but the connection drops before the control comes back to GSTN portal, and the re-ping facility will help in finding the status of such transactions.
10. Upon receipt of confirmation from the bank regarding successful completion of the transaction, GSTN will inform the relevant tax authorities about payment of taxes. A copy of the paid challan (downloadable/printable) with auto-populated CIN, date and time of payment and a statement confirming receipt of the amount by the bank will be provided to the taxpayer by GSTN.
11. Thereafter the tax paid challan (CIN) will be credited to the tax ledger account of the taxpayer. It was discussed and agreed by the Committee that there would be 20 ledger accounts(one for each Major heads i.e. CGST, IGST, Additional Tax & SGST and 4 Minor heads for each Major Head i.e. Interest, Penalty, Fees & Others).
ii. OVER THE COUNTER PAYMENT THROUGH AUTHORIZED BANKS:
Process involved in Over the Counter payment of GST through authorized banks:
1. Every tax payer who wants to avail the facility of OTC payment (only for paying tax upto certain amount – The limit will be prescribed in Rules), will access GSTN for generation of a challan through which payment is to be made.
2. Upon creation of the draft challan, the taxpayer will fill in the details of the taxes that are to be paid. From the available payment options, the taxpayer would select option of cheque, DD or cash based payment. The name of the authorized bank and its location (city/town/village) where the instrument/cash is to be presented is required to be filled in necessarily. No outstation cheques are to be accepted except those which are payable at par at all branches of bank having presence at that location. In case cheque or DD is selected as the mode of payment, entry of Instrument details is recommended, but not mandatory, as the taxpayer may not have the instrument ready at the time of challan generation. The tax payers 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 challan so generated will have a Unique Common Portal Identification Number (CPIN), assigned only when the challan is finally generated, that will help the portal and other authorities in identifying the challan. After the challan is generated, it will be frozen and will not be allowed to be modified. The CPIN / challan so generated would be valid for a period of seven days within which payment is to be tendered. GSTN will inform the challan details including validity period to the CBS (Core Banking System) of the selected bank on a real time basis.
3. Upon successful saving of the challan details, the challan will be available on the dashboard of the taxpayer in downloadable/printable form. So the taxpayer can either download the challan form and print it offline or can print the challan directly from GSTN. If the payment is made by cheque or DD, the challan itself would have a disclaimer that the payment is subject to realization of cheque or DD.
4. Thereafter taxpayer will approach the branch of the authorized bank for payment of taxes along with the instrument or cash. Since the tax payer is required to pay four types of taxes and the amount is required to be credited in the accounts maintained by bank for each type of tax, one option for the tax payer is to submit four instruments for crediting to the respective accounts. Four instruments may not be required if pooled account for realization of instrument is maintained. The matter was discussed in detail and it was recommended, that in the interest of facilitating the payment, each e-FPB should maintain a GST pool account so that the tax payer can issue only one instrument which will be written in the name of the GST pool account of the concerned bank. The bank’s IT system upon realization of the instrument, will immediately first credit that amount to the GST pool account and then immediately transfer that amount to the respective tax accounts [CGST, IGST, Additional Tax or SGST(39 accounts) as per details in challan (CPIN Data)]. However RBI representatives observed that since there would be real-time sharing of data between GSTN and Agency Banks, the details would be available to the bank official before submission of the challan by the customer. In such a situation, GSTN would have already shared the break-up of the total amount to the bank and the bank needs to credit the same in the appropriate head. The internal Accounting mechanism of bank may be left to the bank to design, as the requirement here is the proper booking and reporting of the transaction which banks would have to ensure. It was decided that those banks need not operate a GST pool account which can credit the amount in the respective tax accounts ‘on the fly’.
5. There should be a linkage between the GSTN and the Core Banking System (CBS) of the authorized banks whereby the details of challan are shared with the Authorized bank selected by the tax payer on real time basis so that they can be stored in the database of banks and also to facilitate the cashier / Teller to verify the details of the challan submitted by the remitter. This will eliminate the need for manual feeding of the challan details by the cashier / Teller in the banking system and thereby reduce the errors in data processing.
6. The taxpayer should preferably carry two copies of the challan, one for the bank’s record and another for himself to get acknowledgement. In the alternative, he can use a normal pay-in-slip and mention CPIN and challan amount in it. On approaching the bank, he should provide the challan itself or at least CPIN number on normal pay-in-slip to enable the cashier / teller to fetch the challan details in his system. There should be a customized IT application (software) in the bank’s system to accept GST receipts on OTC basis. While each branch can accept GST receipts, the credits should always be to the GST accounts maintained and operated by e-FPB. The banks not having such system should not be allowed to accept OTC payments.
7. The cashier / teller will verify the details of challan, payment instrument and amount provided by the taxpayer with those displayed in his system and should accept the receipt only when no discrepancy is found. If the challan has crossed its validity period of 15 days, the bank’s system itself should bar acceptance of the payment. In any case, the challan would also not be available in the GSTN and consequently in the bank’s system because it would have been purged from the System by GSTN upon the expiry of the 15 day validity period.
8. The tax payer may make payment by cash or instruments drawn on the same bank or on some other bank in the same city. In case of cash payments or same bank instruments, the payment would be realized immediately and a transaction number (BTR/BRN) and CIN will be generated immediately at the authorized bank’s system which will be unique for each and every transaction. Such successful transactions shall be intimated to GSTN on real-time basis with details similar to those mentioned in para 21 above. This message will convey to the common portal that the payment has been successfully received at the bank’s counter.
9. After generation of BRN, the bank cashier may give a printed receipt from his system including the Bank’s transaction number (BTR/BRN) and CIN. However, if it not found feasible to print a separate receipt, the cashier should record the BRN and CIN generated from the system, on the tax payer’s copy of the challan or pay-in-slip as acknowledgment.
10. In case an instrument drawn on another bank in the same city is presented, the payment would not be realized immediately. In such case, CIN will not be generated immediately, and cashier should write only the system generated acknowledgment number on the challan / pay-in-slip and a stamp to the effect that the acknowledgment by the bank is subject to realization of the cheque / DD. The tax-payer need not visit the bank again to get CIN as the same will be communicated to him from GSTN as per the process detailed in para 47 & 48 below. However, if he does not receive any communication from GSTN within 3 days, he should visit the bank to ascertain the status of his payment.
11. Where the instrument is drawn on another bank, there should be a validation in the bank’s system to prevent out station cheques (except those payable at par across cities), and to also prevent deduction of commission charges for instruments drawn on another bank in the same city.
12. The Authorized Bank would send the instrument for collection and the transaction would be treated as complete and successful only after the actual receipt of the amount by the said bank.
13. The bank will inform GSTN on real time basis in two stages. First when an instrument is given OTC. At this stage the Authorized bank will forward an electronic string to GSTN which will contain the following details:
a) CPIN;
b) GSTIN;
c) Challan Amount;
d) Bank’s acknowledgement number.
On receipt of the above first message, GSTN should send a SMS to the tax payer, in addition to showing the status of the payment on its portal as subject to realization.
14. The bank’s system would send a second message to GSTN once the cheque is realized, the total amount is credited first to GST pool account and thereafter the funds are credited to the respective tax accounts as per CPIN data (as stated in para 34 above, GST pool accounts are not required to be maintained by those banks who can credit the amount in the respective tax accounts ‘on the fly’). On the day of realization, it will become a successful transaction to be reported to RBI on T+1 (T = 0 being day of realization). After the successful completion of transaction, the second acknowledgement will have the same details as mentioned in para 46 above with three additional details:
a) CIN;
b) Date of Realization of Cheque;
c) Time of realization of cheque;
d) Bank Transaction Number (BRN/BTN).
On receipt of the second message, GSTN would send a SMS to the tax payer, in addition to updating the status of the payment on its portal.
15. This 2 stage intimation by authorized banks is recommended for the
following reasons:
a) Keep a watch on delays on the part of authorized banks in realization;
b) Maintaining a system based control as all branches of authorized banks will be allowed for OTC.
16. On receipt of the real time information for a successful transaction as per para 41 above (cash, cheque on same bank or DD) or receipt of the second message from Bank as per para 47 above (cheque drawn on another bank), the tax paid challan will be credited to the tax ledger account of the taxpayer. If the OTC payment was subject to realization (para 46), the initial status on the dashboard will state so. If the cheque is dishonoured, the presenting bank should inform GSTN about the fact of dishonour and same will be informed by GSTN to taxpayer and reflected on his dashboard.
III. PAYMENT THROUGH NEFT/RTGS FROM ANY BANK (INCLUDING OTHER THAN AUTHORIZED BANKS):
Process involved in payment through NEFT / RTGS from any Bank (including other than authorised banks):
1. Every tax payer who wants to avail the facility of payment through NEFT/RTGS mode will access GSTN for generation of a challan through which payment is to be made.
2. Upon creation of the draft challan, the taxpayer will fill in the details of the taxes that are to be paid. As agreed by the RBI representative, RBI would itself be the recipient of the amount transferred through NEFT / RTGS, thus eliminating the need for a link-up first with an authorized branch to receive the payment and thereafter its transfer to the RBI. RBI would thus perform the role of Authorized bank and that of e-FPB in this mode of payment. In this view, the name of the authorized bank will be auto populated as RBI. As a part of the challan preparation, a tax payer will have to choose the mode of payment as NEFT / RTGS from any bank. The challan so generated will have a Unique Common Portal Identification Number (CPIN), assigned only when the challan is finally generated. The generated Challan will have a NEFT / RTGS mandate associated with it. This mandate will contain NEFT / RTGS pooling bank account details (i.e. of RBI) along with IFSC for receiving money. After the challan is generated, it will be frozen and will not be allowed to be modified. The CPIN so generated would be valid for a period of seven days within which payment is to be tendered but would remain live with RBI for a period of 30 days. NEFT/RTGS mandate would have the validity period of CPIN printed on it. As mentioned above, there shall be a provision in the GST Law whereby any taxpayer using challan under this mode beyond the validity period of seven days of the CPIN more than two times would be barred from availing this facility by GSTN.
3. Upon successful saving of the challan details, the challan will be available on the dashboard of the taxpayer in downloadable / printable form. So the taxpayer can either download the challan form or print it offline or can print the challan directly from GSTN.
4. Besides the generation of challan, GSTN will also generate NEFT / RTGS mandate form in prescribed format. The CPIN generated at the portal shall be incorporated in NEFT/RTGS mandate form in “Account Name” field. RBI would provide for suitable validations for this field. The “Sender to Receiver” field shall carry the entry “GST Payment”. In case of NEFT / RTGS payments, there shall also be a disclaimer on the challan copy and the mandate form that the payment through NEFT / RTGS is a transaction between the tax payer and his bank and the payment will be deemed to be received by the government only when the amount is credited to the designated account in RBI. The payments in this mode would be permitted only against cheques and no cash payments would be permitted to initiate NEFT / RTGS transaction for the reasons mentioned in Para 67 below.
5. The following details will be available in the NEFT / RTGS mandate form:
a) Beneficiary IFSC : IFSC of RBI hosting the NEFT / RTGS account for GST;
b) Beneficiary Account Number : Account Number of RBI’s pooled account
for GST;
c) Account Name : CPIN of relevant challan (suitable validation to be provided by RBI);
d) Total Amount;
e) Sender to Receiver Remarks: GST Payment.
The form will have a provision to write the NEFT/RTGS charges manually and then record the total amount to be collected by the bank (sum of challan amount and charges). The entire NEFT/RTGS form will be auto-populated except the part relating to the charges.
6. Thereafter taxpayer can print a copy of NEFT / RTGS mandate form and approach his bank branch (any bank) for payment of taxes (within a period of seven days of the generation of CPIN, so that when the amount is received by RBI, the CPIN is still valid.) The payments in this mode would be permitted only against cheques and no cash payments would be permitted to initiate NEFT / RTGS transaction. NEFT/RTGS mandate would have validity period of CPIN printed on it. As already mentioned above, there should be a provision in GST law whereby any taxpayer using this mode beyond the validity period (seven days) of the CPIN more than twice would be barred from availing this facility by GSTN.
7. GSTN will inform RBI on real time basis the following details:
a) CPIN;
b) GSTIN;
c) Challan Amount;
d) Break Up of the Amount into CGST, IGST, Additional Tax and SGST;
e) State/UT Government to which SGST remittance pertains.
8. The accepting bank should add its charges for doing NEFT / RTGS remittance and collect gross amount from the customer. The amount indicated as GST amount for remittance should be transferred by the remitter bank to the designated account of the government in RBI. For the proper identification of the transaction, there should be a Unique Transaction Reference (UTR) that should be conveyed along with file details to RBI. The remitter bank must also mention the CPIN in the NEFT/RTGS mandate as part of the Account Name. The Remarks field shall mention `GST Payment’.
9. Upon successful completion of the transfer at the end of the remitter bank, the remitter will get a receipt detailing Unique Transaction Reference (UTR). Taxpayer should thereafter login back to GSTN portal and update the challan details with Unique Transaction Reference (UTR) provided by the remitter bank for NEFT / RTGS transaction. An alternate SMS based facility for such updating by the tax payer (instead of internet based) may be established by GSTN to facilitate those taxpayers who do not have an internet access. On receipt of the transaction number, GSTN will communicate this Unique Transaction Reference (UTR) (for the corresponding CPIN) also to RBI on real time basis.
10. Once the RBI receives the payment in its account with NEFT/RTGS message, it will link up the payment with the CPIN earlier received from GSTN and report the transaction to GSTN on real time basis through an electronic string which will contain the following details:
a) CIN (CPIN and Bank Code of RBI);
b) GSTIN;
c) Challan Amount;
d) BRN of RBI;
e) Unique Transaction Reference (UTR);
f) Time of Payment;
g) Date of Payment.
11. Upon receipt of the electronic string regarding successful completion of the transaction by GSTN, the tax paid challan will be credited to the cash ledger of the taxpayer. The GSTN will thereafter lock the CIN so that it cannot be used again.
12. As recommended in para 58 above, the Mode III may be implemented with arrangement of CPIN being mentioned as the “Account Name” in NEFT/RTGS message. RBI will provide for a suitable validation for this field. In such arrangement, the chances of error will be only marginal as the remitter banks take care to mention the account name correctly in any NEFT/RTGS message. In case of error, NEFT/RTGS unique transaction number (UTR) intimated by the tax payer can be used as a secondary identifier. The primary matching by RBI should be with reference to CPIN only, i.e., CPIN as contained in NEFT/RTGS message and CPIN data provided by GSTN. On successful matching, the GST pooled account should be debited and the respective 39 tax accounts (CGST, IGST, Additional Tax and SGST) should be credited simultaneously as per the challan details with generation of CIN and BRNs. At this stage, the transaction should be treated as successful and CIN and BRNs should be communicated to GSTN by RBI.
13. As stated in para 15 above, though the CPIN is valid for a period of 7 days, the same would remain live with RBI for a period of 30 days. Thus RBI can accept the payment during the said period of 30 days. In case payment is received after the expiry of 30 days, RBI would refund the said amount to the remitter bank. Keeping in view this requirement, it has been recommended, as mentioned above, that payments in cash would not be accepted for initiating NEFT / RTGS transaction.
14. The Committee deliberated the need for a pooled GST account. Based on inputs provided by RBI, a receiving account is necessary for NEFT/RTGS process. Therefore, a pooled GST account as an operational necessity will have to be opened in RBI. This account may be opened in the name of the Accounting Authority of the Government of India solely for the operational reasons as a transit account. There should be a validation in RBI system that no funds pertaining to the transactions with date value T=0 are left in this account when the scroll is prepared on T+1.
15. If the matching based on CPIN does not succeed, the role of UTR as secondary matching identifier becomes important. However, it is possible that RBI may receive NEFT/RTGS message even before the tax payer updates his challan with UTR number and GSTN informs RBI on real time basis. In case of failure of CPIN based matching and UTR not being available, the funds will remain in the pooled account till the UTR is received or scroll is prepared, whichever is earlier. Such credit in the pooled account should be with a “CPIN mis-match” flag that a secondary level matching needs to be carried out before scroll is generated on T+1 basis. Once UTR is provided by GSTN, the secondary matching of all such transactions remaining in the pooled account should be carried out. If a transaction can now be linked to the correct challan, the respective Tax accounts should be credited with generation of CIN and BRNs. There should be a validation in RBI system that all the transactions with “CPIN mis-match” and date value T=0 in the pooled account are subjected to secondary level matching before generation of scroll for all taxes.
16. If the matching based on CPIN and UTR NEFT / RTGS transaction number UTR both fails, the entire receipt should be credited to CGST account with a “CPIN mis-match” flag so that the Accounting Authorities of Government of India can account such amount under a separate suspense sub-head (possibly receipts awaiting transfer i.e. RAT).
17. In all such cases of CGST credits with “CPIN mis-match”, the tax payer will not get a confirmation SMS from GSTN and his ledger will not reflect the payment. He can be expected to provide UTR at this stage. Once the UTR becomes available, GSTN should carry out the matching with CPIN, and communicate following details to the Accounting Authorities of Government of India and concerned State Government.
a) RBI scroll number and date which carried the credit (CGST scroll);
b) BRN;
c) CIN (of credit to CGST account with “CPIN mis-match” flag);
d) Challan amount;
e) Breakup of total amount in CGST, IGST, Additional Tax and SGST;
f) Name of State Government to whom SGST pertains.
18. Based on the communication from GSTN, CGST Accounting Authorities shall take steps for clearing the suspense sub-head by transferring the credit to CGST, IGST and Additional Tax accounting heads, and for carrying out inter-government transfer to the concerned State Government.
19. The reconciliation between e-Scroll sent by RBI on T+1 and the transaction details available with GSTN (provided earlier by RBI) will be performed using CIN and Unique Transaction Reference (UTR).
