Every registered regular tax payer has to furnish GST returns on a monthly basis and pay the tax due by the 20th of the month. If a tax payer does not pay the tax due, interest on the tax due will be applicable from the day on which the tax was due to be paid.
If a person furnishes a monthly return without paying the tax due, the return furnished will be considered as an Invalid Return. Without furnishing the return for a month and paying the tax due, the subsequent month’s return cannot be furnished. Hence, it is necessary to understand how to pay the tax liabilities under GST in order to avoid the penalties of non-payment of tax.
For the purpose of paying tax, every registered dealer will have 3 ledgers in the GST portal:
1. Electronic tax liability register
All liabilities of a person towards tax, interest, penalty, late fee or any other amount will be debited here.
2. Electronic cash ledger
Every deposit made by a person towards tax, interest, penalty, late fee or any other amount will be credited here.
3. Electronic credit ledger
Input tax credit, as self-assessed and claimed in Form GSTR-2 by a person, will be credited here. This can only be used by a person for paying tax, and not other amounts such as interest, late fee, and so on.
To pay the liabilities shown in the Electronic tax liability register, a person can use the balance in the Electronic cash ledger and Electronic credit ledger. When a liability is paid,
- The Electronic tax liability register will be credited by the amount paid.
- The Electronic credit ledger will be debited by credit used for making the payment.
- The Electronic cash ledger will be debited by the amount of deposit used for making the payment.
Let us understand this with an illustration.
Ravindra Apparel has the following balances on 20th December ’17:
1. Set-off the tax liability by using the credit available in Electronic credit ledger
Tax liability can be set-off by using input tax credit as discussed in our blog ‘How to set off Input Tax Credit against Tax Liability in the GST regime’.
In our illustration, Ravindra Apparel’s tax liability is set-off by their input tax credit as shown below:
Hence, Ravindra Apparel has balance liability of Rs.60,000 (10,000+10,000+40,000) to be paid.
2. Deposit money in the Electronic cash ledger to pay the balance tax liability
To pay the balance tax liability, Ravindra Apparel should deposit the tax liability amount in the Electronic cash ledger. For this, Ravindra Apparel should:
a. Generate challan for making the payment
Challan for the payment can be generated from the GST portal using Form GST PMT-06. The details of the amount to be deposited towards tax, interest, penalty, fees or any other amount should be entered in the challan. The challan generated will be valid for 15 days.
b. Make the payment using the given modes
Payment can be done using the following modes:
- Internet banking through authorised banks
- Credit card or debit card through authorised banks
- National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) from any bank
- Over the counter (OTC) payment through authorized banks for deposits up to Rs.10,000 per challan per tax period, by cash, cheque or Demand Draft (DD)
Note: If the payment is to be made by NEFT or RTGS, a mandate form will be generated along with the challan on the GST portal. The mandate form has to be submitted to the bank from where the payment is made. The mandate form will be valid for 15 days.
c. Generation of CIN and credit to Electronic cash ledger
Once the amount paid by a dealer is credited to the concerned government account, a Challan Identification Number (CIN) will be generated and the same will be mentioned in the challan in the GST portal. On receipt of the CIN, the amount paid will be credited to the person’s Electronic cash ledger.
In our illustration, Ravindra Apparel deposits Rs.60,000 to pay the balance tax liability on 20th December ’17. Once the payment is credited, the amount will be utilised for paying the balance CGST, SGST and IGST liabilities. After payment of the tax due, Ravindra Apparel’s ledgers appear as shown below:
Forms pertaining to tax payment under GST
|Form GST PMT-01||Electronic tax liability register will be maintained in Form GST PMT-01|
|Form GST PMT-02||Electronic credit ledger will be maintained in Form GST PMT-02|
|Form GST PMT-03||Order of rejection of claim for refund of balance in Electronic credit ledger/Electronic cash ledger, issued by an authorised officer|
|Form GST PMT-04||If a person notices any discrepancy in his Electronic credit ledger, he can communicate the same using Form GST PMT-04|
|Form GST PMT-05||Electronic cash ledger will be maintained in Form GST PMT-05|
|Form GST PMT-06||Challan for payment of tax, interest, penalty, fees or any other amount|
|Form GST PMT-07||If a person’s bank account has been debited but CIN has not been generated or CIN has been generated but not communicated to the GST portal, the person can inform the same using Form GST PMT-07|