FAQ’s on Payment of Tax
Q 1. What is Electronic tax liability register?
Ans: Electronic tax liability register is a register to be maintained in the common portal of GST in Form GST PMT-1 to record all liabilities of a taxable person. Part-I is for recording return related liabilities and Part-II is for recording other than return related liabilities.
Q 2. What are the possible debits’ and credits’ to Electronic tax liability register?
Ans: The possible debits’ and credits’ to Electronic tax liability register are as follows:
| Debit | Credit |
|---|---|
| i) amount payable towards tax, interest, late fee or any other amount payable as per the return filed by the said person; | i) Electronic credit ledger |
| ii) 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. | ii) Electronic cash ledger |
| iii) amount of tax and interest payable as a result of mismatch under section 37 or section 38 or section 56; or | iii) Relief given by the appellate authority |
| iv) any amount of interest that may accrue from time to time. | iv) Reduction in penalty (if any) |
Q 3. What is Electronic credit ledger?
Ans. Electronic credit ledger is a register to be maintained in the common portal of GST for each registered taxable person in Form GST PMT-2 to record input tax credit claimed, utilization, reversal and refund.
Q 4. What are the possible debits’ and credits’ to Electronic credit ledger?
Ans. The possible debits’ and credits’ to Electronic credit ledger are as follows:
| Debit | Credit |
|---|---|
| i) Discharge of any liability in accordance with Section 44; | i) Input tax credit claimed; |
| ii) Towards claim for refund of unutilized amount. | ii) Reversal of amount debited earlier on account of final rejection of refund (Form GST PMT-2A) |
Q.5. What is Electronic cash ledger?
Ans. Electronic cash ledger is a register to be maintained in the common portal of GST for each registered taxable person in Form GST PMT-3 to record deposit of tax, interest, penalty and other amounts, utilization thereof and refund.
Q 6. What are the possible debits’ and credits’ to Electronic cash ledger?
Ans. The possible debits’ and credits’ to Electronic cash ledger are as follows:
| Debit | Credit |
|---|---|
| i) Discharge of any liability in accordance with Section 44; | i) Payment made through challan on receipt of CIN |
| ii) Towards claim for refund of any Amount. | ii) Amount deducted under Section 46 and claimed in Form GSTR-2 |
| iii) Amount collected under Section 56 and claimed in Form GSTR-2 |
Q 7. How one can deposit tax under GST?
Ans. 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 and pay the amount through the following means:
(i) Internet banking through authorized banks;
(ii) Credit/debit card after registering the same with the Common Portal through the authorized bank;
(iii) National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) from any bank;
(iv) 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.
Q 8. To whom the restriction of deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft is not applicable?
Ans. The restriction of deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft is not applicable to the deposits made by:
(a) Government Departments or any other deposit to be made by persons as may be notified by the Board/Commissioner (SGST) in this behalf;
(b) Proper officer or any other officer authorized to recover outstanding dues from any person, whether registered or not, including recovery made through attachment or sale of movable or immovable properties;
(c) Proper officer or any other officer authorized for the amounts collected by way of cash or cheque, demand draft during any investigation or enforcement activity or any ad hoc deposit.
Q 9. What is the validity of Form GST PMT-4 generated at the common portal?
Ans. The validity of Form GST PMT-4 generated at the common portal shall be valid for a period of fifteen days.
Q 10. What are the special procedures to be followed for deposit of tax by way of NEFT or RTGS?
Ans. In order to deposit tax by way of NEFT or RTGS, the taxable person needs to generate a mandate form along with the challan and submit it to Bank for processing.
Q 11. What is the validity of mandate form generated at the common portal?
Ans. The mandate form generated at the common portal shall be valid for a period of fifteen days.
Q 12. What is Challan Identification Number (CIN) and when can it be generated?
Ans. CIN is the number generated for identification of payment made by the taxable person.
It will be generated upon successful credit of the amount to the concerned government account maintained in the authorized bank.
Q 13. What to do if an account is debited with the amount paid under GST but CIN is not generated?
Ans. Where the bank account of the concerned taxable person, or the person making the deposit on his behalf, is debited but no Challan Identification Number (CIN) is generated, the said person may represent electronically in FORM GST PMT-6 through the Common Portal to the Bank or electronic gateway through which the deposit was initiated.
Q 14. Should the payment be made only from the account of the taxable person?
Ans. There is no restriction on the account to be used by the taxable person for payment of tax. The payment can be made by a third party from his account using the GSTIN of the taxable person to get the amount debited to the electronic cash ledger of the taxable person.
Q 15. Assume that tax is paid at 11PM on 20th October 2017 and returns are filed on the same day. If for any reason the amount is credited to the account of the appropriate Government on 21st October 2017, will it amount to default?
Ans. The date of credit to the account of the appropriate Government in the authorized bank shall be deemed to be the date of deposit in the electronic cash ledger. Therefore, in this case the date of payment/deposit of tax shall be 21st October 2017, which means a delay of one day in payment of tax.
Q 16. Where one can see, the payment made in GST portal?
Ans. All payments will get reflected in the ‘electronic cash ledger’ of the person. As the portal is common for CGST, SGST and IGST, all the payments will be reflected in a single electronic cash ledger. However, cross utilization may not be allowed within the ledger.
Q 17. Will the input tax credit claimed by a taxable person get added to the balance in electronic cash ledger?
Ans. No, input tax credit will appear separately in the ‘electronic credit ledger’ maintained in the common portal.
Q 18. What are the differences between electronic cash ledger and electronic credit ledger?
Ans. The differences between the two could be tabulated as under:
| Electronic cash ledger | Electronic credit ledger |
|---|---|
| Can be used for payment of tax, interest, penalty and other amounts | Can be used only for payment of output tax |
| Credit to the ledger will be through payment vide Challans | Credit to the ledger will be through input tax credit claimed as per GSTR-2 (inward return) |
| Refund for excess balance in the cash ledger can be applied through GSTR-3 (monthly returns) | Refund for excess balance in credit ledger may be refunded only though the forms specified |
Q 19. Can one use input tax credit for payment of interest/penalty?
Ans. No, as per Section 44 (4) of the CGST Act, amount available in the electronic credit ledger may be used for making any payment towards ‘output tax ’payable only. As per Section 2 (71) of the CGST Act. ‘Output tax’ in relation to a taxable person, means the CGST/SGST chargeable under this Act on taxable supply of goods and/or services made by him or by his agent and excludes tax payable by him on reverse charge basis. Therefore, input tax credit cannot be used for payment of interest/penalty.
Q 20. Can one use input tax credit for payment of tax under reverse charge basis?
Ans. No. The amount available in the electronic credit ledger may be used for making any payment towards ‘output tax’. Further, the definition of output tax u/s 2 (71) specifically excludes tax payable under reverse charge basis. Therefore, input tax credit cannot be used for payment of tax under reverse charge basis.
Q 21. Is there any order in which liability of a person shall be discharged or it can be appropriated as per the convenience of the tax payer ?
Ans. No, every taxable person shall discharge his tax and other dues in the following order:
(a) self-assessed tax, and other dues related to returns of previous tax periods;
(b) self-assessed tax, and other dues related to return of current tax period;
(c) any other amount payable under the Act or the rules made there under
including the demand determined under section 66 or 67.
Note 1: “Tax dues” means the tax payable under this Act and does not include interest, fee and penalty.
Note 2: “Other dues” means interest, penalty, fee or any other amount payable under the Act or the rules made thereunder.
Q 22. Is the principle of unjust enrichment applicable for payments made under GST?
Ans. Yes, every person who has paid the tax on goods and/or services under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods and/or services.
Q 23. Who will bear the commission charged by bank towards payment of taxes online?
Ans. The commission charged by bank towards payment of taxes online shall be borne by the taxable person making such payment.
Q 24. What is the procedure for payment of tax for a casual taxable person or non-resident taxable person who is required to pay tax in advance for obtaining registration?
Ans. As GSTIN will not be available with the casual taxable person or non-resident taxable person required to pay tax in advance for obtaining registration, they will be provided a temporary identification number using which they can deposit tax vide Form GST PMT-5.
Q 25. Can one pay CGST, IGST and SGST together or should these be paid separately through different challans?
Ans. Form GST PMT-4 contains separate columns for CGST, IGST and SGST which shall deposit the amount to the respective account of the government though paid through a single challan; therefore, CGST, IGST and SGST can be paid together in a single challan.
Q 26. What is the due date for payment of tax under GST?
Ans. As per Section 34 (7), every registered taxable person, who is required to furnish a return shall pay to the account of the appropriate Government the tax due as per the return not later than the last date on which he is required to furnish such return.
Therefore, the due date for payment of tax shall be the due date for filing of returns.
Q 27. Should the challan be apportioned against a fixed tax period or can be used against any liability of a taxable person?
Ans. The challan for payment of tax (Form GST PMT-4) does not contain details of the period for which the deposit of tax is made and any amount deposited through the challan is debited to the electronic cash ledger, from which the amount can be utilized against any liability.
Q 28. Is HSN code for goods or accounting code for service relevant for payment of tax?
Ans. The format of challan does not contain column to disclose the HSN code or the accounting code and therefore, it is not relevant for payment of tax.
Q 29. How do we ensure that SGST is paid to the appropriate State Government?
Ans. There is a specific column in Form GST PMT-4, wherein the Name of the State will be auto-populated/selected at the time of filling the challan to ensure that SGST is paid to the appropriate State Government.
Q 30. Should a taxable person maintain minimum balance in the electronic cash ledger?
Ans. There are no provisions in the Revised Model GST Law or rules which prescribe maintenance of minimum balance in the electronic cash ledger.
Q 31. What are the provisions in relation to interest under GST?
Ans. Interest is applicable on delayed payment of tax at the rate to be notified calculate from the first day on which such tax was due to be paid. Interest is applicable on undue or excess claim of input tax credit as well (Section 45).
Q 32. If there is default in payment of tax and filing of returns, whether interest is payable on gross tax payable or net tax payable?
Ans. Gross tax payable, if there is default in payment of tax and filing of returns, input tax credit will become ineligible as per Section 16(2) (d) of the CGST Act. Therefore, the taxable person will not be allowed claim for set-off of input tax credit for calculation of interest.
Q 33. There is no specific provision for interest under IGST Act. Does this mean interest is not applicable for delay in payment of IGST?
Ans. No, the provisions of Section 45 of the CGST Act have been made applicable to IGST Act vide the machinery provision contained in section 17 of IGST Act.
Q 34. Is payment of interest mandatory?
Ans. Interest being compensatory in nature, it is mandatory. Further, Section 45 uses the word ‘shall’ which also indicates that interest is mandatory.