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.
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 (PAOs)/State AGs.
The provisions related to payment are given in sections 49 and 50 of CGST Act and rules for payment. In UTGST Act the relevant provisions are covered in sections 9 and 10. Payment of tax rules contain the procedural requirement. Sec. 20 of the IGST Act, 2017 and sec. 21 of the UTGST Act, 2017 provide for the applicability of provision of Payment of Tax Contained in CGST Act, 2017. SGST Act to be passed by respective states will contain similar provisions.
MAINTENANCE OF ELECTRONIC LEDGERS
These are running electronic ledgers maintained on the dashboard of a taxpayer by GSTN. These would be updated in real tune 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)
(i) Electronic Cash ledger: As per section 49(1), any amount deposited to the account of the concerned Government (CGST, SGST/UTGST, IGST and Cess) shall be credited to the electronic cash ledger of such person.
(ii) Electronic Credit Ledger (ITC ledger): As per section 49(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 and Cess.
(iii) Electronic Liability Register (Tax Liability ledger): As per section 49(7) of the Act, liabilities of a taxable person in form of tax, interest, fee & penalty towards CGST, SGST, IGST & Cess is recorded and maintained in this ledger.
Any discrepancy in Electronic liability ledger, Electronic Credit ledger, Electronic cash Ledger shall be communicated in Form GST PMT-04.
MODE OF PAYMENT
As per section 49(1) of the Act, every deposit made towards tax, interest, penalty, fee or any other amount paid through GST PMT 06 shall be credited to the electronic cash ledger of a taxable person by:
(i) Internet Banking through authorized banks;
(ii) Credit card or Debit card through the authorised bank;
(iii) National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) from any bank;
(iv) Over the Counter payment (OTC) through authorized banks for deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft:
Provided that the restriction for deposit up to ten thousand rupees per challan in case of an Over the Counter (OTC) 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 authorized for the amounts collected by way of cash, cheque or demand draft during any investigation or enforcement activity or any ad hoc deposit.
PMT 06 once generated will be valid for a period of fifteen days.
PROCESS OF PAYMENT
Payment of tax wifi be made using the Challan GST PMT-06. The process for the same will be as follows:
(i) 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.
(ii) Where the payment is made by way of NEFT or RTGS 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.
(iii) On successful credit of the amount to the concerned government account maintained in the authorised bank, a Challan Identification Number (CIN) will be generated by the collecting Bank and the same shall be indicated in the challan.
(iv) On receipt of CIN from the authorized 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.
(v) Where the bank account of the person concerned, or the person making the deposit on his behalf, is debited but no Challan Identification Number (CIN) 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.
IDENTIFICATION NUMBER FOR EACH TRANSACTION
There will be identification for each transaction of payment in GST
(i) A unique identification number shall be generated at the Common Portal for each debit or credit to the electronic cash or credit ledger, as the case may be.
(ii) The unique identification number relating to discharge of any liability shall be indicated in the corresponding entry in the electronic tax liability register.
(iii) A unique identification number shall be generated at the Common Portal for each credit in the electronic tax liability register for reasons other than those covered under sub-rule (2).
RULES FOR UTILIZATION OF AMOUNT IN ELECTRONIC LEDGER
Utilization of amount in cash ledger: As per section 49(3) of the Act, amount available in the electronic cash ledger may be used for making any payment towards:
• any other amount payable
Utilization of amount in credit ledger: As per section 49(4) of the Act, amount available in the electronic credit ledger may be used for making any payment towards
• Output tax under the Act.
DATE OF DEPOSIT/DATE OF PAYMENT
(1) As per the Explanation to section 49 of the CGST/SGST 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.
(2) The date of payment towards any liability shall be the date of debit of cash from electronic cash ledger or date of debit of ITC from electronic credit ledger.
ITC UTILIZATION RULES
ITC Utilization shall be made in the following order:
As per Section 49(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/ UTGST liability.
As per section 49(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.
As per section 49(5)(b) in CGST 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.
As per section 49(5)(e) and (f) of the Act, cross utilization of credit between CGST & SGST/UTGST shall not be permitted.
REFUND OF BALANCE AMOUNT IN ELECTRONIC LEDGER
As per section 49(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 54 and the amount collected as CGST/SGST shall stand reduced to that extent.
RULES FOR DISCHARGING LIABILITY
As per section 49(8) of the Act, the taxable person shall discharge his tax and other dues in the following order:
(i) self-assessed tax, and other dues related to returns of previous tax
(ii) self-assessed tax, and other dues related to return of current tax period;
(iii) any other amount payable under the Act/the rules including the demand determined under section 51.
As per section 49(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.
INTEREST ON DELAYED PAYMENT OF TAX
As per section 50(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 not exceeding 18%.
As per section 50(2) of the Act, interest shall be calculated from the first day succeeding such tax was due to be paid.
As per section 50(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 42(10) or undue or excess reduction under section 43(10). The interest rate is such case will not exceeding 24%. Manner for computation of interest shall be prescribed in the rules.