GST Payment- Rules, Process and Form
GST payment is one of the major requisites for a business to stay compliant. As per the guidelines, every registered regular taxpayer has to furnish the GST returns on a monthly basis, and pay the requisite tax by the GST payment due date – 20th of every month. The GST payment system is going to be a completely online process – promising a seamless and transparent experience.
GST Payment Rules
As per the GST payment rules, if a person furnishes a GST 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. Also, if the tax due is not paid, interest will be applicable on the same, starting from the GST payment due date on which the tax was supposed to be paid.
Hence, it is necessary to understand the GST payment method in order to avoid the penalties of non-payment of tax.
GST Payment Process
GST Payment Ledgers
For the purpose of GST tax payment, every registered dealer will need to maintain 3 ledgers in the GST payment portal, which is the starting step of the GST payment process. The 3 ledgers are:
- Electronic tax liability register - All liabilities of a person towards tax, interest, penalty, late fee or any other amount will be debited here.
- Electronic cash ledger - Every deposit made by a person towards tax, interest, penalty, late fee or any other amount will be credited here.
- 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 - only for paying tax, and not for settling other amounts such as interest, late fee, and so on.
GST Payment Ledgers Set-off
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.
How to pay GST online – a step by step process
Here’s how to pay GST online, detailed as follows:
- Set-off the tax liability by using the credit available in Electronic credit ledger
- Deposit money in the Electronic cash ledger to pay the balance tax liability -
- Generate challan for making the GST payment - Challan for the payment can be generated from the GST payment 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.
- Make the GST payment using the given 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.
- 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.
GST Payment Forms
The following GST payment forms are of importance for any dealer liable to pay GST online in India -
|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|
In short, the GST payment process and GST payment schedule are of key importance to any business in order to remain compliant. It is thus necessary for every business to stay aware of the requisite GST payment formats, make the right GST payment calculations, adhere to the GST payment dates and accordingly pass the correct GST payment vouchers in their books, in order to make GST payment online in time, and continue their business in a hassle free manner.