How GST Payments Should Be Made

GST Payments :

After filing GSTR- 1 and GSTR- 2, the business needs to file GSTR- 3 and make GST Payments. Every registered dealer shall reduce his Input Tax Credit (ITC) from the Outward Tax Liability to compute the total GST Payments needed.

Under the GST regime, the tax payment is mainly classified into 3 categories –

1. CGST – Paid to the Central Government on an intra-state sale (E.g.: Within Punjab)
2. SCGT – Paid to the State Government on an intra-state sale (E.g.: Within Punjab)
3. IGST – Paid to the Central Government on an inter-state sale (E.g.: Punjab to Karnataka).

In addition, certain categories of registered dealers need to make these payments –

1. Tax Deductable at Source (TDS) – A process in which tax is deducted by the person before making the payment to the supplier.
2. Tax Collected at Source (TCS) –This is only for E- commerce operators. When an ‘Electronic Commerce Operator’ receives payment (which is consideration by another person for a supply made by someone else), he must collect TCS at the rate to be notified (this rate will not exceed 1%) and pay it to the Government.
3. Interest, fees, penalty or any other payment

Who is liable for GST Payments?

Following persons, required to pay GST –

1. A Registered supplier of goods and services.
2. Registered dealer under Reverse Charge Mechanism (RCM).
3. E-commerce operator requires to collect and pay TCS
4. Dealers deducting TDS

When should GST Payment be made?

After filing GSTR- 1 and GSTR- 2, the registered dealer needs to file GSTR- 3 and make GST payments.

What are E- Ledgers?

E- Ledgers or Electronic Ledgers are statements of cash and Input tax credit maintained electronically on GST Portal. There are mainly 3 types of Electronic Ledgers –

1. Cash Ledger – This ledger is used for making any payment on account of GST. It contains information about all deposits made in cash and TDS and/ or TCS made on account of the taxpayer.
2. Credit Ledger – This ledger is used to make tax payments only. Interest, penalty and fees cannot be paid in the credit ledger.
3. Liability Ledger – It reflects the total tax liability after the deduction of Input tax credit for a particular month.

How to make GST Payments?

GST Payments can be made in following two ways –

1. Credit Ledger – Dealers uses the balance of Input Tax Credit to make GST payments. No other payments such as interest, penalty or fees can be made in credit ledger.
2. Cash Ledger – GST Payments – made in cash or through bank. Any balance tax liability, after deduction of Input Tax Credit (ITC), is paid using balance in Electronic Cash Ledger.

There are 3 methods of making payment:

• Internet banking and debit/credit cards of authorized banks
• Over the counter payment through authorized banks (Limit -?10,000)
• Payment through NEFT/RTGS from any bank.

After making the payment, the dealer will receive a challan containing all the details of the tax paid. Thereafter, the cash ledger account of the taxpayer will receive the Challan Identification number (CIN).

Penalty for Non – Payment or Late payment of GST –

For non – payment or delayed payment of GST, the dealer has to pay am interest of 18%. He is also liable to pay penalty of 10% of tax due or?10,000 -whichever is higher.