The payment process under the GST system has become relatively easier and convenient. It is possible to keep track of demands raised, payments made, refunds due, etc., on the GST common portal itself. The whole system of payment is executed through 3 electronic ledgers. Let us look at each of them in brief:
In this article, we will also talk about:
The Electronic Cash Ledger keeps track of all payments made towards various types of taxes, interest, late fee, penalty or any other amount payable under GST for related matters. When any amount needs to be paid, it is done by utilising the balance in the Electronic Cash Ledger. The Electronic Cash Ledger is credited with the deposit of money made through the challan and also includes the TDS/TCS claimed under GST.
The Electronic Credit Ledger records all the ITC claimed by the taxpayer on a self-assessment basis through Form GSTR-3B. It also records the ITC distributed to the taxpayer by an Input Service Distributor. The balance in the Electronic Credit Ledger can only be used to make the payment on tax. That means other liabilities like interest, late fee, penalty, etc., can not be paid through this ledger.
This Electronic Liability Register usually reflects the monthly/quarterly tax dues net of ITC for a taxpayer. It will also be debited if the tax department raises any demand. This register is credited with amounts from the Electronic Credit Ledger (towards tax dues only) and Electronic Cash Ledger (for all types of dues).
When payments are under the GST law, the amounts are applied in the following order:
- Towards the self-assessed tax and other dues (such as interest, penalty, late fee, etc.) for previous tax periods
- Towards the self-assessed tax and other dues for the current tax period
- Demand raised under section 73 and 74 of the CGST Act, 2017.
The date on which the tax amount is credited in the State Government/Central Government’s treasury account will be considered as the date of payment of tax (not the date on which the registered person’s account is debited).
- Tax payments are made using challans that can be generated only online.
- The payment in respect of each challan may be made either online or offline. In case it is made offline, there is a limit of INR 10,000 per challan per tax period.
- As you may already know, the Goods and Services Tax Network (GSTN) manages the GST common portal. It matches the payment details with the banking network, which is especially useful in case of offline payments. In the erstwhile service tax regime, taxpayers used to make online payments in a hurry, before 8 PM if they wanted it to be reflected on the same day. However, online GST payments can be made post 8 PM too and will be remitted to the Government Account faster.