Procedures and Rules of e-Payment of tax in GST -Regime

The payment of tax or dues on supplies of goods and services shall be made to the Government by the registered person through electronically at the Common portal in GST regime. The manner of payment of tax and dues of the Government in erstwhile provisions of Central Excise and Service Tax even though was made through electronically but not on the common portal. The earlier procedures of credit / debit of Cenvat Credit on inputs/ capital goods and tax adjustment were carried by manually maintaining Cenvat register and balance payment of tax in PLA has been dispensed with in GST regime.

Statutory Provisions for payment of Tax in GST:

Section 49 of the CGST Act, 2017 has prescribed the manner of payment of tax, interest, penalty and other amounts in the following ways:

(1) Every deposit made by a person by internet banking or by using prescribed mode of payment or cash (OTC) shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed.

(2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41; to be maintained in such manner as may be prescribed.

(3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed.

(4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed.

(5) The amount of input tax credit available in the electronic credit ledger of the registered person shall be utilized as per prescribed provisions. Accordingly, credit on account of IGST, CGST, SGST and UTGST shall be utilized and adjusted in the ledger.

(6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of section 54.

(7) All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register in such manner as may be prescribed.

(8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely:––

(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 thereunder including the demand determined under section 73 or section 74.

(9) Every person who has paid the tax on goods or services or both under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods or services or both.

Every registered person is required to compute his tax liability on a monthly basis by adjusting of the Input Tax credit against the outward tax liability, if there is any balance tax liability the same is required paid to the Government.

Manner of avail and utilize of the ITC credit:

The manner of availment and utilization of ITC tax credit of CGST, SGST, IGST and UTGST has explained in the following Table.

 Credit of CGST cannot be used for payment of SGST / UTGST and credit of SGST / UTGST cannot be utilized for payment of CGST.

Interest on delayed payment of tax under GST:

(1) If any person fails to pay the tax to the Government within the period prescribed, shall pay voluntarily interest at such rate , not exceeding 18% as may be notified by the Government.

(2) The interest shall be calculated from the day succeeding the day on which such tax due to be paid.

(3) A taxable person, who makes an undue or excess claim of input tax credit or undue or excess reduction in output tax liability, shall pay interest at such rate not exceeding 24% as may be notified by the Government.

Procedures of Maintenance of electronic ledger as per GST Rules:

Rule 85, 86 & 87 of the CG & ST Rules, 2017 has prescribed that in the GST regime, all taxpayers have to maintain 3 types of electronic ledgers on Common GSTN portal namely, Electronic liability ledger, Electronic Credit ledger and Electronic Cash ledger.

Electronic Liability Ledger:

Rule 85 of the CGST Rules, 2017 has specified Electronic Liability Ledger and the details of liability shall be recorded and credited in this ledger as under :-

(1) The electronic liability register specified under sub-section (7) of section 49 shall be maintained in Form GST PMT-01 on the Common GSTN portal. All liabilities accruing and payable by a taxable person will be recorded in this register and shall be debited to the said register.

(2) The electronic liability register of the person shall be debited the following amounts:

(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.

(3) Subject to the provisions of section 49, payment of every liability by a registered person as per his return shall be made by debiting the electronic credit ledger maintained as per rule 86 or the electronic cash ledger maintained as per rule 87 and the electronic liability register shall be credited accordingly.

(4) The amount deducted under section 51, or the amount collected under section 52, or the amount payable on reverse charge basis, or the amount payable under section 10, any amount payable towards interest, penalty, fee or any other amount under the Act shall be paid by debiting the electronic cash ledger maintained as per rule 87 and the electronic liability register shall be credited accordingly.

(5) 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.

(6) 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.

(7) 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.

Electronic Credit Ledger:-

Rule 86 of the CGST Rules, 2017 specified for Electronic Credit ledger all the taxes paid on inputs goods, capital goods, inputs services, tax paid reverse charge and credit received through ISD shall be recorded and credited in the ledger shall be maintained as under:

(1) The electronic credit ledger 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.54

(2) The electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the provisions of section 49.

(3) Where a registered person has claimed refund of any unutilized amount from the electronic credit ledger in accordance with the provisions of section 54, the amount to the extent of the claim shall be debited in the said ledger.

(4) If the refund so filed is rejected, either fully or partly, the amount debited under sub-rule (3), to the extent of rejection, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03

(5) Save as provided in the provisions of this Chapter, no entry shall be made directly in the electronic credit ledger under any circumstance.

(6) 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.

Electronic Cash Ledger:-

Rule 87 of the CGST Rules, 2017 specified for Electronic Cash ledger shall be maintained electronically on Common GSTN Portal as per the following guidelines:

(1) The electronic cash ledger under sub-section (1) of section 49 shall be maintained in FORM GST PMT-05 for each person, liable to pay tax, interest, penalty, late fee or any other amount, on the common portal for crediting the amount deposited and debiting the payment there from towards tax, interest, penalty, fee or any other amount.

(2) Any person, or a person on his behalf, shall generate a challan in FORM GST PMT-06 on the common portal and enter the details of the amount to be deposited by him towards tax, interest, penalty, fees or any other amount.

(3) The deposit under sub-rule (2) shall be made through any of the following modes, namely:-

(i) Internet banking through authorised banks;

(ii) Credit card or Debit card through the authorised bank;

(iii) National Electronic Fund Transfer or Real Time Gross Settlement from any bank; or

(iv) Over the Counter payment through authorised banks for deposits up to Rs.10,000/- per challan per tax period, by cash, cheque or demand draft:

Provided that the restriction for deposit up to Rs.10,000/- per challan in case of an Over the Counter payment shall not apply to deposit to be made by –

(a) Government Departments or any other deposit to be made by persons as may be notified by the Commissioner in this behalf;

(b) Proper officer or any other officer authorised to recover outstanding dues from any person, whether registered or not, including recovery made through attachment or sale of movable or immovable properties;

(c) Proper officer or any other officer authorised for the amounts collected by way of cash, cheque or demand draft during any investigation or enforcement activity or any ad hoc deposit: Provided further that the challan in FORM GST PMT-06 generated at the common portal shall be valid for a period of 15 days.

(4) 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.

(5) Where the payment is made by way of National Electronic Fund Transfer or Real Time Gross Settlement mode from any bank, the mandate form shall be generated along with the challan on the common portal and the same shall be submitted to the bank from where the payment is to be made:

Provided that the mandate form shall be valid for a period of fifteen days from the date of generation of challan.

(6) On successful credit of the amount to the concerned government account maintained in the authorised bank, a Challan Identification Number shall be generated by the collecting bank and the same shall be indicated in the challan.

(7) On receipt of the Challan Identification Number from the collecting bank, the said amount shall be credited to the electronic cash ledger of the person on whose behalf the deposit has been made and the common portal shall make available a receipt to this effect.

(8) Where the bank account of the person concerned, or the person making the deposit on his behalf, is debited but no Challan Identification Number is generated or generated but not communicated to the common portal, the said person may represent electronically in FORM GST PMT-07 through the common portal to the bank or electronic gateway through which the deposit was initiated.

(9) Any amount deducted under section 51 or collected under section 52 and claimed in FORM GSTR-02 by the registered taxable person from whom the said amount was deducted or, as the case may be, collected shall be credited to his electronic cash ledger in accordance with the provisions of rule 87.

(10) Where a person has claimed refund of any amount from the electronic cash ledger, the said amount shall be debited to the electronic cash ledger.

(11) If the refund so claimed is rejected, either fully or partly, the amount debited under sub-rule (10), to the extent of rejection, shall be credited to the electronic cash ledger by the proper officer by an order made in FORM GST PMT-03.

(12) A registered person shall, upon noticing any discrepancy in his electronic cash ledger, communicate the same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04.

Identification number for each transaction:-

Rule 88 of the CGST Rules, 2017 specified Identification number for each transaction shall be generated at the Common GSTN Portal and as per the prescribed principles.

Conclusion: The electronically payment of tax has implemented in GST regime, which is based on earlier provision of tax but there is paradigm changes in tax payment system, like preparation of Challan, maintenance of various ledgers, adjustment of ITC and determination of balance liability of tax automatically on common portal are certainly amazing changes will be helpful to the taxpayers as well as tax collectors in GST regime. The objective of the Government to make India as “Digital India “ in GST era also can be achieved provided that Common portal would work smoothly and facilitates taxpayers to carry out all activities namely returns filing in time , tax payment in time , proper ITC adjustment and tax refunds payment to the claimants without any hesitation.

Author Details:-

Ramesh Chandra Jena, B. A (Hons)., M.A (Eco)., D.M.M., LL.B.

Senior Manager- Indirect Taxation,  KSK Energy Ventures Limited.