Know How to Pay GST in India – GST Payment Procedure

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1.0 Introduction: GST Payment Procedure

As the cabinet clears the GST bill, the GST is all set to implement from 1st July 2017. Currently, GST registration procedure for existing taxpayer is on. The government has done this for ease of the people so that they don’t have to run once GST is implemented.

For ease in GST payment process, government has introduced the concept of three different ledgers through which payment of taxes takes place. The three ledgers include electronic cash ledger, electronic credit ledger, and electronic liability ledger. Every ledger has its own format and hence everyone should know about this.

The payment of taxes is governed by section 44 and the GST payment rules. Section 44 lays down the important points while rules explain it in further details. Unlike service tax and income tax, where payment of taxes are made through challan, under GST, any payment of taxes, interest, penalty etc is made through electronic cash ledger. To make any payment towards CGST, SGST, IGST, the required amount should be first deposited into the electronic cash ledger.

There are three ledgers prescribed and everyone has their own conditions. They are briefly explained as below:

Electronic Cash Ledger: Every deposit made towards tax, interest, penalty, fee or any other amount by a taxable person shall be credited to the electronic cash ledger of such person. [Subsection (1) of Section 44].

Electronic Credit Ledger: The input tax credit as self-assessed in the return of a taxable person shall be credited to his electronic credit ledger. [Subsection (2) of Section 44].

Electronic Liability Register:  All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register. [Subsection (7) of Section 44].

Let’s discuss the each of the ledger/register in further details

2.0 Electronic cash Ledger

  • The electronic cash ledger shall be maintained in FORM GST PMT-3 for each registered taxable person on the Common Portal for crediting the amount deposited and debiting the payment therefrom towards tax, interest, penalty, fee or any other amount.
  • A registered taxable person, or any other person on his behalf, shall generate a challan in FORM GST PMT-4 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.
  • Any deposit of amount in electronic cash ledger may be made through the following modes;
  • Internet Banking through authorized banks;
  • Credit card or Debit card after registering the same with the Common Portal through the authorised bank;
  • National Electronic Fund Transfer (NeFT) or Real Time Gross Settlement (RTGS) from any bank;
  • 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:

Also Read: Know How To File Your GST Returns

3.0 Electronic Credit Ledger

The input tax credit as claimed in the return of a taxable person shall be credited to his electronic credit ledger. The amount available in the electronic credit ledger may be used for making any amount towards output tax payable.

2. The electronic credit ledger shall be maintained in FORM GST PMT-2 for each registered taxable person on the Common Portal and every claim of input tax credit under the Act shall be credited to the said Ledger. Further, in case of any tax liability settled shall be debited to the electronic credit ledger.

3. Where a registered taxable person has claimed refund of any unutilized amount from the electronic credit ledger, the amount to the extent of the claim shall be debited in the said ledger.

However, if the refund so filed is rejected, either fully or partly, the amount debited under point (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-2A.

Important Point

For the purpose of this rule, a refund shall be deemed to be rejected, if the appeal is finally rejected or if the claimant gives an undertaking in writing to the proper officer that he shall not file an appeal.

4. The order of utilizing the electronic credit ledger is as follows;


Important points on GST Payment Procedure

The Input tax credit of CGST shall not available for the payment of SGST.

The Input Tax credit of SGST shall not be available for the payment of CGST.

The balance in the credit ledger after the payment if tax, interest, penalty, fee or any other amount payable under the act may be refunded. The condition of refund shall be discussed in the chapter of refunds.

4.0 Electronic Liability Register

1. All the liabilities of a taxable person under this act is recorded and maintained in an electronic liability register.

2. The electronic tax liability register shall be maintained in FORM GST PMT-1 on the Common Portal and all amounts payable by a taxable person shall be debited to the said register.

3. The following liabilities shall be debited:
The amount payable towards tax, interest, late fee or any other amount payable as per the return filed by the said person;

The amount of tax, interest, penalty or any other amount payable as determined by a proper officer in pursuance of any proceeding under the Act or as ascertained by the said person;

The amount of tax and interest payable as a result of mismatch under section 29 or section 29A or section 43C; or

Any amount of interest that may accrue from time to time.

Also Read: 4-Slab GST: The Post Implementation Challenges and Obstacles

5.0 Conclusion

The payment of taxes is a very important concept as it has to be done very frequently. Therefore, get well versed with the GST payment procedure and go and win the world.

About the Author:

CA Paras Mehra, is a professional associated with Hubco.in, a brand for GST registration and return filings in India. You can reach the author at paras.mehra18@gmail.com or paras@hubco.in.

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