One of the best thing of GST system is that government has made the entire process online, which means you can pay taxes and file your return online without leaving your office.
As per the GST law, a registered taxpayer in case of Intra-state supply of goods or services or both, has to pay central tax (CGST) and state tax (SGST). For inter-state supply of goods or services or both, the taxpayer has to pay IGST.
CGST and SGST will go to the account of central government and state government respectively.
In addition to the above payment of taxes, certain category of registered person has to deduct GST at source (TDS) or collect GST at source (TCS).
Wherever applicable, the taxpayer is also required to pay interest on delayed payment of taxes, penalty and fees to the government. In this article, we will be discussing when and how to pay goods and services tax or GST in India for taxable supplies.
When to pay GST
Payment of GST and filing of return has been defined based on the type of registration you have availed.
If you are registered under the GST law and not part of composition scheme, you are required to file your return by 10th and pay GST by the 20th of the following month.
At present, return is filed by using GSTR -1 and tax is paid by using GSTR – 3B forms.
To de-stress the GST system government of India has staggered last dates of filing GSTR-3B. Now due to this change, instead of 20th of the following month, three dates are introduced based on categories of taxpayers.
Due to this change, we have now three dates, 20th, 22nd and 24th of every month. If the taxpayer’s annual turnover is Rs 5 crore and above in the previous financial year then, the date of filing is on or before 20th of the following month.
Now the taxpayers having annual turnover of below Rs 5 Crore in the previous financial year has been divided into following two categories;
- If the taxpayer is from Chhattisgarh, Madhya Pradesh, Gujarat, Daman and Diu, Dadra and Nagar Haveli, Maharashtra, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu, Puducherry, Andaman and Nicobar Islands, Telangana and Andhra Pradesh then, the last date of filing GSTR-3B return is 22nd of the following month without late fees.
- Taxpayers from Jammu and Kashmir, Ladakh, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand and Odisha with annual turnover below Rs 5 crore in previous financial year, are required to file their GSTR-3B on or before 24th of the following month without late fees
If your aggregate turnover is less than Rs 1.5 Crore, then return in GSTR-1 will be filed quarterly, but GST has to be paid monthly on or before the due date as discussed above.
For instance, if you are filing for the month of January, the GSTR-1 has to be filed on or before 10th February and GSTR-3B has to be filed on or before the 20th/22nd/24th February.
If you have opted for quarterly return filing then, return for the period starting from January to March has to filed on or before 10th April, but GSTR-3B has to be filed for each month i.e. for January, February and March on or before 20th/22nd/24th February, 20th/22nd/24th March and 20th/22nd/24th April respectively.
In case, you have availed for composition scheme, your return filing and payment of GST is quarterly. Composition scheme dealer need to pay tax and file return on or before the 18th of the month following the quarter for which taxes are paid and gst return is filed.
These dates of filing return and payment of GST can be changed based on technical issues on the common portal or for any other reasons. Therefore, you are requested to check the due date from your return filing option available at the common portal.
How GST is paid by supplier
GST is paid by using following two ledgers maintained online in common portal;
- electronic credit ledger
- electronic cash ledger
This means, GST liability can be paid either by utilizing input tax credit or by cash. After registration on the common portal, these two ledgers will be automatically opened online and displayed.
Every deposit made towards tax, interest, penalty, fees or any other amount by the registered person or on behalf of such person by using internet banking, credit or debit cards, NEFT, RTGS or any other mode shall be credited to the electronic cash ledger maintained on the common portal.
There is no limit on mode of deposit if its internet banking, credit/debit card or NEFT/RTGS.
Over the counter payment has a limit of Rs 10,000 per challah per tax period by cash, cheque or demand draft. However, over the counter payment limit is not applicable where deposits are made by proper officer, government departments or any other officer authorized.
Credit ledger is where your input tax credit is deposited over time after self-assessed in the return. Each month amount available in this ledger gets reduced by the liability of tax up to the available input tax credit. Balance liability if any left out after such set off, needs to be paid in cash or from your electronic cash ledger.
The amount in electronic credit ledger can be used for payments towards output tax under the GST law. Output tax means, GST chargeable on taxable supply of goods or services or both made by him or by his agent but excludes tax payable on reverse charge basis. As discussed earlier, it cannot be used for payment of interest, penalty or late fees.
How input tax credit or ITC utilized for payment of GST
Here are the steps how GST from input tax credit ledger is settled;
- Input tax credit on account of IGST is first utilized towards payment of IGST and then remaining amount if any is utilized towards payment of CGST and SGST, as the case may be UGST, in that order.
- Input tax credit on account of CGST is first utilized towards payment of CGST and then remaining amount is utilized for payment of IGST.
- Input tax credit on account of SGST/UTGST shall first be utilized towards payment of SGST/UTGST and the remaining amount if any is utilized towards payment of IGST.
This means input tax credit on account of SGST/UTGST shall not be utilized towards payment of CGST. Similarly, CGST shall not be utilized towards payment of SGST/UGST.
The balance in the electronic cash ledger or credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this act or the rules made thereunder may be refunded.
Sequence of discharge of tax and dues
As per section 8, a taxable person in GST shall discharge his tax liability and other dues under this act or the rules made thereunder in the following order;
- Self assessment tax and other dues related to returns of the previous tax period;
- Self assessment tax and other dues related to the return of the current tax period
- Any other amount payable under the act or the rules made thereunder including the demand determined.
If earlier dues of tax, interest, penalty and fees are not paid, the return filed for the current period will not be considered as valid return. Therefore, the recipient will not be allowed to claim input tax credit.
Interest on delayed payment of GST
A taxable person who has failed to pay the tax or any part thereof to the account of central or state government within the prescribed period, shall pay interest at the rate of 18% for the period for which the tax and any part thereof remains unpaid. Interest shall be calculated from the day succeeding the day on which such tax was due to be paid.
If the taxpayer makes an undue or excess claim of input tax credit or undue or excess reduction in output tax liability, he shall be liable to pay interest on such undue or excess claim at the rate of 24%.
Rounding off of tax
Tax, interest, penalty, fine or any other sum payable and the amount of refund or any other sum due, under the provisions of GST law, shall be rounded off to the nearest rupee. For this purpose, where such amount contains a part of a rupee consisting of paise then, if such part is fifty paise or more, it shall be increased to one rupee. If such part is less than fifty paise it shall be ignored. Please note, rounding off is applicable only while paying consolidated payments to government, its not applicable to tax shown in the GST invoice.
