PAYMENT OF TAXES UNDER GST

 

As compared to the MVAT era where MVAT return could have been filed showing unpaid tax liability, in the GST era due to restrictions imposed by GST Portal, Return in Form GSTR-3B cannot be filed without payment of self-assessed tax. Please note in the GST regime installment facility is available only in respect of assessed dues.

Summarized Provisions relating to Payment of taxes are as under:

• Provisions relating to the payment of tax are enshrined in section 49 of the CGST Act and Rules 85 to 88A of the CGST Rules.
• Taxpayer filing return in GSTR-3B is required to make payment on a monthly basis before filing their return. A composition dealer is required to make payment on a quarterly basis.
• Tax can be paid either from an electronic cash ledger or electronic credit ledger. However, interest, penalty, fees etc. needs to be paid through an electronic cash ledger.
• Every payment of tax, interest, penalty, fee or any other amount is debited to an electronic cash ledger (Form GST PMT-05) maintained online by the portal.
• Any excess balance in the electronic cash ledger after payment of tax, interest, penalty etc. can be claimed as a refund in terms of section 54 of the CGST Act. Registered person is required to file form RFD-01 online for claiming such refund.
• Challan for Tax payment (Form GST PMT-06) does not contain any period and therefore, tax and other dues are adjusted in the following order:

1. self-assessed tax, and other dues related to returns of previous tax periods;
2. self-assessed tax, and other dues related to the return of the current tax period;

iii.     any other amount payable under this Act or the rules made thereunder including the demand determined under section 73 or section 74.

• If tax is paid under the wrong head (Major head viz. Integrated tax, Central tax, State/UT tax and Cess) or Minor head viz. tax, interest, penalty, fee and others), the registered person can transfer the amount from one major/minor head to another major/minor head or from one minor head to another minor head under the same major head by filing Form GST PMT-09 on the portal.
• Payment of tax does not tantamount to discharge of liability unless such deposit is adjusted against tax liability by way of offset adjustment. Electronic cash ledger will be debited to the extent GST liability is discharged in cash.
• Self-assessed Liability can also be discharged/ set-off either by way of filing of Form GSTR-3B or GST DRC-03.
• Tax payment can be made online, through internet banking, NEFT or RTGS. If tax payment is up to
  Rs. 10,000 per challan per tax period then select branches of authorized banks also accept Over the Counter (OTC) payment i.e. cash.
• Though only a registered person can make GST payment, however, an unregistered person can also make payment on the basis of a temporary identification number generated through the GST portal.
• Tax deducted u/s 51 of the CGST Act as well as Tax collected u/s 52 of the CGST Act also tantamount to payment of tax, provided the registered person has claimed such TDS or TCS on the portal by accepting such tax and by way of filing return online on the portal.
• Combined reading of section 49(5) of the CGST Act, Rule 88A of CGST rules & CBIC Circular No. 98/17/2019-GST dated 23rd April 2019 suggests following order for utilization of ITC:

1. IGST ITC shall be first utilized towards payment of IGST liability, and the amount remaining, if any, may be utilized towards the payment of CGST and SGST or UTGST liability, as the case may be, in any order and in any proportion.
2. Only after IGST ITC has been fully utilized, a taxpayer can utilize CGST / SGST or UTGST ITC for discharge of any liability.
3. CGST ITC shall be first utilized towards payment of CGST liability and thereafter payment of IGST liability, if any.
4. SGST ITC shall be first utilized towards payment of SGST liability and thereafter payment of IGST liability, if any.
5. CGST ITC can never be utilized for payment of SGST Liability and vice versa.
6. Portal as of now suggests the utilization of ITC however such utilization can be changed/modified by the taxpayer in accordance with the aforesaid order of utilization.

Tax payment under QRMP

In case the taxpayer has opted for QRMP, tax payment can be bifurcated into 2 broad categories as under:

Tax payment for the first two months of the Quarter

• In case taxpayer has opted for Quarterly Return Filing and Monthly Payment of Taxes (QRMP), then taxpayer is needed to deposit tax using form GST PMT-06 by the 25th of the following month, for the first and second months of the quarter. The taxpayers can pay their monthly tax liability either in the Fixed Sum Method (FSM), or Self Assessment Method (SAM) for the first and second months of the quarter.
• Under FSM the taxpayer must pay an amount of tax mentioned in a pre-filled challan in the form GST PMT-06 as under:

Sr. no.	Type of Taxpayer	Tax to be paid under FSM
1	Who has furnished GSTR-3B quarterly for the last quarter	35% of tax paid in cash in the preceding quarter
2	Who has furnished GSTR-3B monthly during the last quarter	100% of tax paid in cash in the last month of the immediately preceding quarter

 

• Under Self Assessment Method the taxpayer can pay self-assessed tax liability by considering the tax liability on their outward supplies and the input tax credit available as per form GSTR-2B. Further under this method is quite possible that taxpayer may not be required to pay any additional tax taking into account liability on outward supplies and the input tax credit available as per form GSTR-2B or there is a tax liability but balance in the electronic cash/credit ledger is adequate to pay such liability. In such NIL liability situation scheme does not envisage any tax payment from the taxpayer.
• While generating the challan for the first two months of a quarter (M1 and M2), taxpayer must select “Monthly payment for quarterly taxpayer” as a reason for generating the challan.

For tax payment for the third month of the Quarter

• The aforesaid options of FSM of SAM are not available for payment of tax for the third month (M3) of the quarter to persons availing the QRMP Scheme.
• For payment of Tax for the third month of a quarter (M3), taxpayers can click the button ‘Create Challan’ in Payment Table 6 of Form GSTR-3B and file GST-PMT-06 Challan, for depositing any amount towards their tax liability.
• It is clarified that no late fee is applicable for delay in payment of tax in the first two months of the quarter, however, a late fee would be applicable for delay in furnishing the quarterly return or details of outward supply.
• Tax deposited for the two months can be used for adjusting liability for the Quarter in Form GSTR-3B and cannot be used for any other purpose till the filing of return for the Quarter.