Q 1. What are the Payments to be made in GST regime?
Ans. In the GST regime, for any intra-state supply, taxes to
be paid are the Central GST (CGST, going into the account of the Central
Government) and the State GST (SGST, going into the account of the concerned
State Government). For any inter-state supply, tax to be paid is Integrated GST
(IGST) which will have components of both CGST and SGST. In addition, certain
categories of registered persons will be required to pay to the government
account Tax Deducted at Source (TDS) and Tax Collected at Source (TCS). In addition,
wherever applicable, Interest, Penalty, Fees and any other payment will also be
required to be made.
Q 2. Who is liable to pay GST?
Ans. In general the supplier of goods or service is liable to
pay GST. However in specified cases like imports and other notified supplies,
the liability may be cast on the recipient under the reverse charge mechanism.
Further, in some cases, the liability to pay is on the third person (say in the
case of e-commerce operator responsible for TCS or Government Department
responsible for TDS).
Q 3. When is GST payment to be done by the taxable person?
Ans. At the time of supply of Goods as explained in Section 12
and at the time of supply of services as explained in Section 13. The time is
generally the earliest of one of the three events, namely receiving payment,
issuance of invoice or completion of supply. Different situations envisaged and
different tax points have been explained in the aforesaid sections.
Q 4. What are the main features of GST payment process?
Ans. The payment processes under proposed GST regime will
have the following features:
• Electronically generated challan from GSTN Common Portal
in all modes of payment and no use of manually prepared challan;
• Facilitation for the taxpayer by providing hassle free,
anytime, anywhere mode of payment of tax;
• Convenience of making payment online;
• Logical tax collection data in electronic format;
• Faster remittance of tax revenue to the Government
Account;
• Paperless transactions;
• Speedy Accounting and reporting;
• Electronic reconciliation of all receipts;
• Simplified procedure for banks;
• Warehousing of Digital Challan.
Q 5. How can payment be done?
Ans. Payment can be done by the following methods:
(i) Through debit of Credit Ledger of the taxpayer maintained
on the Common Portal- ONLY Tax can be paid. Interest, Penalty and Fees cannot
be paid by debit in the credit ledger. Tax payers shall be allowed to take
credit of taxes paid on inputs (input tax credit) and utilize the same for
payment of output tax. However, no input tax credit on account of CGST shall be
utilized towards payment of SGST and vice versa. The credit of IGST would be
permitted to be utilized for payment of IGST, CGST and SGST in that order.
(ii) In cash by debit in the Cash Ledger of the taxpayer maintained
on the Common Portal. Money can be deposited in the Cash Ledger by different
modes, namely, E-Payment (Internet Banking, Credit Card, Debit Card); Real Time
Gross Settlement (RTGS)/ National Electronic Fund Transfer (NEFT); Over the Counter
Payment in branches of Banks Authorized to accept deposit of GST.
Q 6. When is payment of taxes to be made by the Supplier?
Ans. Payment of taxes by the normal taxpayer is to be done on
monthly basis by the 20th of the succeeding month. Cash payments will be first
deposited in the Cash Ledger and the taxpayer shall debit the ledger while
making payment in the monthly returns and shall reflect the relevant debit entry
number in his return. As mentioned earlier, payment can also be debited from
the Credit Ledger. Payment of taxes for the month of March shall be paid by the
20th of April. Composition tax payers will need to pay tax on quarterly
basis. Timing of payment will be from 0000 Hrs to 2000 Hrs.
Q 7. Whether time limit for payment of tax can be extended
or paid in monthly installments?
Ans. No, this is not permitted in case of self-assessed liability.
In other cases, competent authority has been empowered to extend the time
period or allow payment in installments. (Section 55 of MGL).
Q 8. What happens if the taxable person files the return but
does not make payment of tax?
Ans. In such cases, the return is not considered as a valid return.
Section 27 (3) of the MGL provides that the return furnished by a taxable
person shall not be treated as valid return unless the full tax due as per the
said return has been paid. It is only the valid return that would be used for allowing
input tax credit (ITC) to the recipient. In other words, unless the supplier
has paid the entire self-assessed tax and filed his return and the recipient
has filed his return, the ITC of the recipient would not be confirmed. As per
section 28, a taxable person who has not furnished a valid return shall not be
allowed to utilize such credit till he discharges his self-assessed tax
liability.
Q 9. Which date is considered as date of deposit of the tax
dues- Date of presentation of cheque or Date of payment or Date of credit of
amount in the account of government account?
Ans. It is the date of credit to the Government account.
Q 10. What are E-Ledgers?
Ans. Electronic Ledgers or E-Ledgers are statements of cash
and input tax credit in respect of each registered taxpayer. In addition, each
taxpayer shall also have an electronic tax liability register. Once a taxpayer is
registered on Common Portal (GSTN), 2 e-ledgers (Cash & Input Tax Credit)
and an electronic tax liability register will be automatically opened and
displayed on his dashboard at all times.
Q 11. What is a tax liability register?
Ans.Tax Liability Register will reflect the total tax
liability of a taxpayer (after netting) for the particular month.
Q 12. What is a Cash Ledger?
Ans. The cash ledger will reflect all deposits made in cash,
and TDS/TCS made on account of the taxpayer. The information will be reflected
on real time basis. This ledger can be used for making any payment on account
of GST.
Q 13. What is an ITC Ledger?
Ans. Input Tax Credit as self-assessed in monthly returns will
be reflected in the ITC Ledger. The credit in this ledger can be used to make
payment of TAX ONLY and not other amounts such as interest, penalty, fees etc.
Q 14. What is the linkage between GSTN and the authorized
Banks?
Ans. There will be real time two way linkage between the
GSTN and the Core Banking Solution (CBS) of 70 the Bank. CPIN is automatically
routed to the Bank via electronic string for verification and receiving payment
and a challan identification number (CIN) is to automatically sent by the Bank
to the Common Portal confirming payment receipt. No manual intervention will be
involved in the process by anyone including bank cashier or teller or the
taxpayer.
Q 15. Can a taxpayer generate challan in multiple sittings?
Ans. Yes, a taxpayer can partially fill in the challan form
and temporarily “save” the challan for completion at a later stage. A saved
challan can be “edited” before finalization. After the tax payer has finalized
the challan, he will generate the challan, for use of payment of taxes. The
remitter will have option of printing the challan for his record.
Q 16. Can a challan generated online be modified?
Ans. No. After logging into GSTN portal for generation of challan,
payment particulars have to be fed in by the tax payer or his authorized
person. He can save the challan midway for future updation. However once the
challan is finalized and CPIN generated, no further changes can be made to it
by the taxpayer.
Q 17. Is there a validity period of challan?
Ans. Yes, a challan will be valid for fifteen days after its
generation and thereafter it will be purged from the System. However, the
taxpayer can generate another challan at his convenience.
Q 18. What is a CPIN?
Ans. CPIN stands for Common Portal Identification Number
(CPIN) given at the time of generation of challan. It is a 14 digit unique
number to identify the challan. As stated above, the CPIN remains valid for a
period of 15 days.
Q 19. What is a CIN and what is its relevance?
Ans. CIN stands for Challan Identification Number. It is a
17 digit number that is 14-digit CPIN plus 3-digit Bank Code. CIN is generated
by the authorized banks/ Reserve Bank of India (RBI) when payment is actually received
by such authorized banks or RBI and credited in the relevant government account
held with them. It is an indication that the payment has been realized and credited
to the appropriate government account. CIN is communicated by the authorized
bank to taxpayer as well as to GSTN.
Q 20. What is the sequence of payment of tax where that
taxpayer has liabilities for previous months also?
Ans. Section 35(8) prescribes an order of payment where the
taxpayer has tax liability beyond the current return period. In such a
situation, the order of payment to be followed is: First self-assessed tax and
interest for the previous period; thereafter self-assessed tax and interest for
the current period; and thereafter any other amounts payable including any
confirmed demands under section 51. This sequence has to be mandatorily
followed.
Q 21. What is an E-FPB?
Ans. E-FPB stands for Electronic Focal Point Branch. These
are branches of authorized banks which are authorized to collect payment of
GST. Each authorized bank will nominate only one branch as its E-FPB for pan
India Transactions. The E-FPB will have to open accounts under each major head
for all governments. Total 38 accounts (one each for CGST, IGST and one each
for SGST for each State/UT Govt.) will have to be opened. Any amount received
by such E-FPB towards GST will be credited to the appropriate account held by such
E-FPB. For NEFT/RTGS Transactions, RBI will act as E-FPB.
Q 22. What is TDS?
Ans. TDS stands for Tax Deducted at Source (TDS). As per
section 37, this provision is meant for Government and Government undertakings
and other notified entities making contractual payments in excess of Rs. 10
Lakhs to suppliers. While making such payment, the concerned Government/authority
shall deduct 1% of the total payable amount and remit it into the appropriate GST
account.
Q 23. How will the Supplier account for this TDS while
filing his return?
Ans. Any amount shown as TDS will be reflected in the electronic
cash ledger of the concerned supplier. He can utilize this amount towards
discharging his liability towards tax, interest fees and any other amount.
Q 24. How will the TDS Deductor account for such TDS?
Ans. TDS Deductor will account for such TDS in the following
ways:
1. Such deductors needs to get compulsorily registered under
section 19 read with Schedule III of MGL.
2. They need to remit such TDS collected by the 10th
day of the month succeeding the month in which TDS was collected and reported
in GSTR 7.
3. The amount deposited as TDS will be reflected in the electronic
cash ledger of the supplier.
4. They need to issue certificate of such TDS to the deductee
within 5 days of deducting TDS failing which fees of Rs. 100 per day subject to
maximum of Rs. 5000/- will be payable by such deductor.
Q 25. What is Tax Collected at Source (TCS)?
Ans. This provision is applicable only for E-Commerce Operator
under section 43C of MGL. Every E-Commerce Operator needs to withhold a
percentage (to be notified later on the recommendation of the GST Council) of
the amount which is due from him to the supplier at the time of making actual
payment to the supplier. Such withheld amount is to be deposited by such
E-Commerce Operator to the appropriate GST account by the 10th of the next month.
The amount deposited as TCS will be reflected in the electronic cash ledger of
the supplier.
Q 26. Is the pre-registration of credit card necessary in
the GSTN portal for the GST payment?
Ans. Yes. The taxpayer would be required to pre-register his
credit card, from which the tax payment is intended, with the Common Portal
maintained on GSTN. GSTN may also attempt to put in a system with banks in
getting the credit card verified by taking a confirmation from the credit card
service provider. The payments using credit cards can therefore be allowed
without any monetary limit to facilitate ease of doing business.