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How & When to pay Taxes under GST?

Niket Agarwal 
on 12 May 2017

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Under the GST laws, a taxpayer shall use the common portal which will compute the tax payable by the assessee on the basis of the information of outward supply furnished by him. Further in case of reverse charge mechanism, the tax payable shall be computed on the basis of information of outward supply declared by the supplier of Goods.

Below is a summary of what Section 49 & 50 of the GST Act contain regarding the Payment of Tax and other dues and Interest Provisions.

Q. What are the Due Dates for Making Tax Payment?

The due dates for payment of taxes are different for Different Categories of Registered Taxable Persons. They are summarised below:


Sr. No.

Category of Assessee

Due Date

Notes

1.

Persons Registered under Composition Scheme

18th of the month following the relevant quarter

Composition Scheme is only for businesses dealing in goods and having Annual Turnover below Rs. 50 Lakhs. Services providers have been kept outside the scope of this scheme

2.

Government Departments or Agencies required to Deduct Tax at Source

10th of the following Month

The Details of the Tax payment shall be Furnished in GSTR-7 Electronically.

3.

Non Resident Taxable Person

Within 20 days from the end of the Calendar Month or within 7 days from the last date of Validity period of Registration

Any person who occasionally undertakes transactions involving the supply of goods or services, or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India s termed as a Non Resident Taxable Person.

4.

E-Commerce Operators

10th of the following Month

-

5.

Other Than Above (i.e. Regular Taxpayers)

20th of the following Month

The Details of Tax Paid need to be furnished in the Return without which the Return shall not be considered a Valid Return.


Q. How to Make Payment of Taxes?

There shall be maintained an Electronic Cash Ledger at the Common Portal which shall contain the transaction Details of the Amounts deposited towards making payments of tax and the utilisation of the same. It shall work pretty much the way a bank account works as of now. The mention of Credit (Cr.) in the Ledger shall mean that the amount has been deposited in the ledger and the mention of Debit (dr.) in it shall mean that the amount has been utilised for the payment of the dues.

How to deposit the amount on the Portal?

The Assessee shall generate Challan in Form GST PMT-6 from the portal and enter details of various amounts (Tax, Interest, Penalty, etc.) to be deposited by him and subsequently make the payment using any of the modes given below:

  • Internet Banking through Authorised Banks
  • Debit or Credit Cards of Authorised Banks
  • NEFT or RTGS from any Bank
  • Over the Counter (OTC) Payment through authorised banks for deposits up to Rs. 10,000 per challan per Tax Month or Quarter as the case may be by Cash, cheque or DD. (In case of Government Departments who need to pay tax, the restriction of Rs. 10,000 shall not apply)

Note: Any Service Commission or Charge payable in respect of such Online Payments shall be borne by the person making the payments. [For e.g. if a person has to deposit Rs. 10 Lacs as Tax Liability and Rs. 500 are the charges for the transaction, then the person shall be required to bear Rs. 500 as cost and deposit the Full value of Rs. 10 Lacs (Adjusted) to the Government.]

How will the Tax Calculation be worked out?

The Tax liability will be worked out based on the information furnished by the supplier of outward supplies in Form GSTR-3. The following details shall be auto populated from other Forms into GSTR-3


Details which will be Auto Populated

From Which Form?

  • Inter-State & Intra-State Supplies to Registered Taxable Persons
  • Inter-State & Intra-State Supplies to Consumers
  • Exports (Incl. Deemed Exports)
  • Revision of supply Invoices pertaining to previous months.

GSTR-1

(Details of outward supplies of taxable goods and/or services effected)

  • Imports of Services
  • Revision of purchase Invoices pertaining to previous months
  • Total Tax Liability on Inward supplies on Reverse Charge
  • ITC Reversal

GSTR-2

(Details of inward supplies of taxable goods and/or services effected claiming input tax credit)

  • Output Tax Added or Reduced on account of Non Rectification or rectification of Communicated Mismatches

The same shall be auto generated by Government System


Subsequently the Tax Liability will be worked out as a sum of Four Parts in Form GSTR-3 as follows:

  • Tax Liability on Outward Supplies – Shall be auto populated from GSTR-3 as explained above.
  • Tax Liability on Inward supplies on Reverse Charge – Shall be Auto Populated from GSTR-2
  • ITC Reversal - Shall be Auto Populated from GSTR-2
  • Output Tax Added or Reduced on account of Non Rectification or rectification of Communicated Mismatches - Shall be auto generated by Government System

What is Electronic Tax Liability Register & how will the Tax paid through Challan be adjusted in Electronic Tax Liability Register?

Electronic Tax Liability Register shall be an electronic register containing 2 Parts (1 – Electronic Credit Ledger & 2- Electronic Cash Ledger) maintained at the Common Portal which shall contain details of all the amounts payable and paid such as Tax, Interest, Fine, Penalty, etc.

It shall contain Dr (Debit) & Cr (Credit) Columns whereby Dr. against an amount means any amount (Tax, Interest, Penalty) payable on outward supplies including exports or under Reverse Charge. Similarly Cr. Against an amount shall mean any amount paid during the period either by utilizing the Input Credit or through Cash. The payments made under Cash shall also be reflected in GST PMT-1.

Further as per the provisions of Section 49(8) of the GST Act, the amount paid into the Electronic Cash Ledger shall be adjusted as per the manner shown below in the example, irrespective of the details mentioned in the Challan:

Mr. Shiv had the following Output Tax Liability –


For the Month of August, 2017

Tax of Rs. 5,00,000 & Interest of Rs. 15,500

For the Month of September, 2017

Tax of Rs. 3,00,000 & Interest of Rs. 12,500


 

Now if he Deposits Rs. 7,00,000 into the Account as Tax amount , it shall not be treated entirely as Tax but as follows:


Description

Amount

Tax Liability for the Month of August, 2017

Rs. 5,00,000

Interest for the Month of August, 2017

Rs. 15,500

Tax Liability for the Month of September, 2017

Rs. 1,84,500

Total

Rs. 7,00,000


Mr. Shiv has no Choice but to adjust the amount in the above manner. He cannot contend that the interest payable for he supplies made in August, 2017 shall be paid by him later on.

How can the Credit on Inputs be utilised?

The Credit available in the Electronic Credit Ledger can be availed in the following manner:


Credit of Tax

First Priority towards utilisation

Second Priority towards utilisation

Input Integrated GST

Output Integrated GST

Output Central GST & State GST

Input Central GST

Output Central GST

Output Integrated GST

Input State GST

Output State GST

Output Integrated GST

Input Union Territory GST

Output Union Territory GST

Output Integrated GST


Note:

  • Credit of Central GST cannot be used for payment of State GST or Union Territory GST.
  • Payments of Tax under Reverse Charge Mechanism and any interest, penalty or fees cannot be made using Input Credits available in the Electronic Credit Ledger.

Q. What are the Interest and Penalty Provisions for late Payment or Non-Payment of Taxes?

As per the relevant provisions, Interest shall be payable at a rate to be specified not exceeding 18% for the delay period in the payment of taxes and the same shall be calculated from a day succeeding the day on which the tax was due to be paid.

Penalty for the same is governed by the provisions of Section 122(1) of the GST Act, which provide for a penalty of Rs. 10,000 or 10% of the tax short paid or unpaid whichever is higher. Such Penalty is leviable in the event of non-payment of taxes for a period exceeding 3 months from the date on which such amount was originally payable. If a case is proved for fraud or wilful misstatement due to which tax was not paid, then in such cases the penalty shall be 10,000 or 100% of the tax short paid or unpaid, whichever is higher.

The author is a Practicing Chartered Accountant and can also be reached at office@niketassociates.co.in


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