PAYMENT OF TAX IN INSTALLMENT UNDER SECTION 80 OF GST ACT 2017

Introduction.

Taxable person is required to make payment of tax and other amount within three month from the date of receipt of order under GST act. Where such person fail to pay amount Proper officer initiate recovery proceeding u/s 79 of GST act to recover amount. Sometimes , it not possible to pay amount due within prescribed time due to financial difficulties. In this backdrop provision has been made in section 80 of GST act to provide for extension of time for payment of amount or allow to pay such amount in instalment.

Section 80 -Payment of tax and other amount in instalment.

On an application filed by a taxable person, the Commissioner may, for reasons to be

recorded in writing, extend the time for payment or allow payment of any amount due under this Act, other than the amount due as per the liability self-assessed in any return, by such person in monthly instalments not exceeding twenty four, subject to payment of interest under section 50 and subject to such conditions and limitations as may be prescribed:

Provided that where there is default in payment of any one instalment on its due date, the whole outstanding balance payable on such date shall become due and payable forthwith and shall, without any further notice being served on the person, be liable for recovery. 

Facility to make GST payment in instalment.

As per section 80 and rule 158 facility has been introduced to allow taxable person to defer payment of tax and other amount or pay such amount in instalments. In order to avail this facility taxable person has to make request to the Commissioner. After considering such request and report received from the jurisdictional office regarding financial ability of taxable person, Commissioner may grant such facility to the taxable person either to make deferred payment of amount or allow to make payment in instalments.

Application for deferment of GST payment/payment in instalments (GST-DRC-020).

Taxable person who intend to avail this facility is required to file an application in form DRC-20 electronically to the Commissioner, for extension the time of payment or for payment in instalments of amount payable. He has to give all details of amount of tax and other amounts due, along with date up to which seek defer payment and number of instalments required, in the application. He has also required to give reason in the application with documentray evidences. Thereafter , jurisdictional officer will submit report to the Commissioner about the financial ability of taxable person to pay the said amount.

Maximum instalments permissible.

As per section 80 the Commissioner has power to allow taxable person to pay an amount in maximum 24 instalments. Taxable person has to request in application that he may be allowed to pay amount in specific number of instalments. The commissioner may reduce number of instalments after considering all facts of the case. Number of instalments are normally depend on financial ability of the applicant taxable person.

Amount eligible for instalments.

Any amount payable by taxable person as per order passed under the act and where the taxable person has not already defaulted on the payment of any amount under the act for which recovery proceeding is on, is eligible for facility to defer payment or payment in instalments. As per section 78 taxable person should pay amount payable as per order within three months from the date of receipt of order. Where such payment is not made within prescribed time , proper officer initiate recovery proceeding u/s 79 to recover amount and thereafter such amount become ineligible for this facility being recovery proceeding is on (Rule 158-3 ). Secondly ,amount due as per the liability self assessed in the returns is not eligible for such facility. It is made clear in rule 158 (3) that no this facility admissible to taxable person where amount involved is less than twenty five thousand.

Passing of order in form GST-DRC-21

The commissioner after considering, reasons and other requests in application and report of jurisdictional officer on financial ability of taxable , pass an order of acceptance or rejection of application for deferment of payment or payment in instalments in form GST-DRC-21. While passing order commissioner may either accept the request as it is or modify request by reducing number of instalments or reject the request after considering facts and circumstances of the case and record reason therefor. It is seen that opportunity of hearing is not mandatory before passing of order. No appeal can be filed against the said order as it is non appelable order .These powers of the commissioner are discretionary in the nature.

Liability of interest on delayed of tax u/s 50 of gst act 2017

As per section 50 interest is leviable on the delayed payment of tax . Thus if taxable person failed to pay tax within prescribed time interest will attract. It is specifically made clear in section 80 that even though time of payment has extended by passing order under said section interest u/s 50 shall be applicable for the period of delay( period from date of expiry of three month of service of relevant order to the date of actual payment of tax ).therefore in such cases taxable person is required to pay interest.

Effect of default in payment of any one instalment

Where there is default in payment of any one instalment on its due date , the whole outstanding balance payable on such date shall become due and payable and shall , without any further notice being served on the person , be liable for recovery . This is strict condition . Therefore precaution must be taken to pay instalment within time.

Conclusion

The taxable person may avail this facility for dues payable as statutory order passed under the act and file an application within three months from the date of service of such order . If application filed late there is possibility of amount become ineligible in view of provision of rule 158 (3) of the rules.

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One Comment

  1. Om Prakash Jain says:

    Sir,
    In the following case laws, the issue of payment of GST in intalments have been decided in favour of the party;
    1. Malayalam Motors Pvt. Ltd. v. Assistant State Tax Officer (2020) 34 J.K.Jain’s GST & VR 438 (Ker)
    2. Pazhayidom Food Ventures (P) Ltd v. Supt. Commercial Taxes (2020) 34 J.K.Jain’s GST & VR 194 (Ker)
    CA Om Prakash Jain
    4 BHA 24, JAWAHARNAGAR,
    JAIPUR-302004
    Tel─9414300730
    0141-3584043

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