GST simplified
GST means Goods and Service Tax. This tax is divided mainly into 3 types of payments:
- IGST – Integrated Goods and Services Tax which is paid to the center in case of inter-state supply.
- CGST – Central Goods and Services Tax which is paid to the center in case of intra-state supply.
- SGST – State Goods and Services Tax which is paid to the state in case of supply within the state.
Why is GST paid? – GST or the goods and services tax is a value-added tax which is charged on most of the goods and services which are sold for domestic consumption. The GST paid by consumers is actually paid to the government by businesses who sell these goods and services. Thus, GST provides revenue or income to the government.
What is the time limit for the payment of GST?
Normally the due date for the payment of GST is 20 days from the end of the month.
However, for those businessmen who are registered under the Composition Scheme, the due date is 18 days after the end of the quarter.
What is the GST payment process in India?
Indian Businesses are now going digital. The GST payment process has become quite simple. To pay GST online, one must go to the GST portal and follow the steps:
| Step 1 | Login to the GST portal and fill up the password, username, and captcha code. |
| Step 2 | After logging to the portal, click on the Services and create E-Challan |
| Step 3 | Enter the sum to be filled and select the payment method. With the details filled, one can generate the Challan |
| Step 4 | A summary of the transaction will be displayed with all the necessary details. If everything is okay, then select the ‘mode of payment’ to pay GST online. |
| Step 5 | Either one can make a payment of GST online through Internet banking or take the Challan’s print-out and then pay GST in the bank. |
After the payment, a detailed challan regarding the tax paid is received by the taxpayer. Thereafter the challan regarding tax paid(CIN) is credited to the taxpayer’s ‘Electronic ledger account.’
Methods of payment to pay GST online:
The GST payment process is now simplified a lot. To pay GST online here are the modes of payment:
- Payments over the counter through the authorized banks
- Internet banking through authorized banks
- Debit or Credit cards of authorized banks
- NEFT / RTGS payments from any bank
However, every challan has a limit of Rs.10,000, for over the counter payment through authorized banks.
Important points to remember for the GST payment process:
To pay GST online one needs an updated knowledge of the following:
| 1. | A Unique Identification Number (UIN) must be provided by the embassies, UN bodies, government offices and/or other notified persons if they want a challan to be created before they login into the GST portal. |
| 2. | If a Tax Return Preparer wants a challan to be prepared before the GST portal login, then he/she needs to mention their Tax Return Preparer Identification Number |
| 3. | If an unregistered dealer, who has a temporary ID, wants a challan to be made before the GST portal login, then he/she needs to state their Temporary Identification Number |
An overview of the new GST payment process:
The GST payment process differs drastically from all the other online payment procedures. Central Board of Excise and Customs (CBEC) has laid down new payment procedures mentioned in Section 49 of the Central Goods and Services Tax Act.
To pay GST online, the new procedure necessitates the following:
1. Electronic Ledgers
The GST portal can now display the tax liabilities of a taxable person through three ledgers which are maintained in the real-time.
- Electronic liability ledger which accounts for the gross tax liability of a taxpayer (Form GST PMT-01)
- Electronic credit ledger which records the tax payments already done during the supply chain. Also, every claim input Tax Credit is recorded here (Form GST PMT-02)
- Electronic cash ledger which reflects all the amounts paid by the taxpayer (Form GST PMT-05)
2. Manner of utilization and cross-utilization of ITC
The input tax credit which is available in the electronic credit ledger shall be employed in the following way:
| Input tax on these | The use of the Input Tax |
| IGST | CGST, IGST,UTGST/ SGST |
| CGST | CGST, IGST |
| UTGST / SGST | UTGST / SGST, IGST |
We can concur from the above table; central tax is not to be used towards state tax or Union territory tax payment and vice versa.
3. Interest on delayed payments
In case of missed payments and payments not made in full, interest will start accumulating from the day after the payment was due. The interest has to be paid voluntarily at an interest rate not exceeding 18%. However, in case of an undue or excess claim of ITC or an undue or an excessive reduction in the output tax liability, interest will be paid at a higher rate not exceeding 24%.
4. GST payment forms
The new GST payment process has issued the following forms to pay GST online with more accuracy and details:
| Sr. no. | Form no. | Summary | Objective |
| 1 | GST PMT-1 | Electronic ledger | Debit of tax, penalty, interest, late fee or any other amount will be done to this register |
| 2 | GST PMT-2 | Electronic ledger | Credit of every claim of ITC shall be recorded to this ledger |
| 3 | GST PMT-3 | Re credit of the refund | Refund, if it is rejected then the amount debited from the electronic ledger (cash or credit) will be recredited through the order of a proper officer |
| 4 | GST PMT-4 | Disparity in electronic credit ledger | Disparity in electronic credit ledger is informed to an officer through this form |
| 5 | GST PMT-5 | Electronic ledger | Cash deposits of any tax, late fee, penalty, interest, or any other amount will be credited to the ledger |
| 6 | GST PMT-6 | Challan for tax deposit | To generate a challan and proceed to pay |
| 7 | GST PMT-7 | Application for revealing variance relating to payment | This application is for the taxpayer. The amount which has to be paid will be debited from the tax payer’s account buttheCIN has not been conveyed by the bank to the Common Portal or though the generated CIN is not reported by the bank (within 24 hrs of debit) |
5. Unique Identification Number (UIN) for each transaction
A UIN will be generated for each transaction done within the GST portal. This UIN will be reflected in the entry done in the electronic ledger.
Conclusion:
The whole new GST payment process has been designed to make the entire process run without difficulty and with least involvement from the government. Technology will undoubtedly encourage people to pay GST online, given the accuracy and in-depth recording of the data.
