Many individuals still need to learn what GST and its components entail. Many issues are raised, including what the ramifications are. “Are GST payments taxable?” is a commonly asked question.
In India, the Goods and Services Tax (GST) is an indirect tax levied on selling goods and services. It is a comprehensive multi-stage, destination-based Tax since it incorporates practically all indirect taxes except a few state levies. The GST is a multi-stage tax imposed at each stage of the manufacturing process; however, it is intended to be refunded to all parties involved in the manufacturing process other than the final consumer, and it is collected at the point of consumption rather than the point of origin, as previous taxes were.
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One must know the top 25 important points about Tax Payments under GST.
1.The types of payments that will be made under the GST system
Under the GST regime, the Central GST (CGST, which goes into the Central Government’s account) and the State GST must be paid for each intra-state supply (SGST, going into the account of the concerned State Government). The Tax to be paid on an interstate supply is the Integrated GST (IGST), which comprises both the CGST and the SGST components. This is a crucial factor to remember concerning GST tax payments.
Furthermore, certain registered individuals will be required to pay Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) to the government account. Where applicable, interest, penalties, fees, and any extra payments will be requested.
2.Time of GST payment to be done by a taxable person
When providing items as indicated in Section 12 and services described in Section 13. The time is determined by the earliest of the three occurrences: receiving money, sending an invoice, or finishing the supply. The preceding sections discussed numerous scenarios as well as several tax aspects.
3.The Primary Characteristics of the GST Payment Process
The following functionalities will be incorporated into the GST tax payment processes:
- In all payment modalities, electronically generated challans from the GSTN Common Portal are used instead of manually prepared challans.
- Allowing taxpayers to pay their taxes whenever and wherever they wish is convenient for them.
- Payments may be made online, which is very convenient.
- Data about tax collection that is both rational and available in electronic format
- Tax revenue is sent to the government’s account more promptly.
- Without the need for paper, transactions are performed.
- Accounting and reporting should be finished as quickly as feasible.
- All receipts are electronically reconciled.
- Bank procedures have been simplified.
- Digital Challan data
4.The Supplier’s Tax Payment Period
The ordinary taxpayer must pay monthly taxes by the 20th of the next month. As previously stated, payment can also be deducted from the Credit Ledger. Taxes for March must be paid by April 20th. Composition taxpayers will have to pay Tax every quarter. Payment will be paid between the hours of 0000 and 2000.
5.No Tax Paid, but Return Filed by a Taxable Person
In certain instances, the Return is not considered genuine. Section 27 (3) of the MGL states that a taxable person’s Return will only be deemed legitimate once the whole Tax payable on the Return is paid. Only the valid Return would be utilised to offer the receiver an input tax credit (ITC). In other words, the recipient’s ITC will only be validated once the supplier has paid his complete self-assessed Tax and filed his Return, and the recipient has submitted his Return.
Section 28 specifies that a taxable individual who has yet to file a proper return will be able to use such credit once his self-assessed Tax due has been paid.
6.The deadline for filing taxes cannot be extended or paid in monthly instalments.
The time restriction for payment of Tax cannot be extended in the case of self-assessed liability, nor can it be paid in monthly instalments. In some circumstances, the responsible authority has been delegated to extend the deadline or allow for instalment payments—section 55 of the MGL. Readers should be aware of this crucial fact about GST tax payments.
7.Entities Liable to Pay GST
In general, GST is payable by the supplier of goods or services. The recipient may be held accountable under the reverse charge system, such as imports and other registered supplies. Furthermore, in some cases, the third party is financially accountable (say, in the case of an e-commerce operator responsible for TCS or the Government Department responsible for TDS).
8.The date of payment by check or credit of the money in the government account is the date of deposit of tax dues.
The date on which the Government account was credited is taken into consideration.
9. E- ledgers
Every taxpayer is required to have an electronic tax liability register. When a taxpayer registers for the Common Portal (GSTN), two e-ledgers (Cash and Input Tax Credit) and an electronic tax obligation register are opened and shown on his dashboard.
10.Payment Methods to Be Used
GST payments can be made using the following methods:
Only Tax can be paid via the Common Portal by debiting the taxpayer’s Credit Ledger. Interest, fines, and fees cannot be paid by debit in the credit ledger. Taxpayers can claim an input tax credit for taxes paid on inputs and use it to pay output tax. However, no CGST input tax credit may be utilised to offset SGST payments and vice versa. The IGST credit could be utilised to pay the IGST, CGST, and SGST in that sequence.
By debiting the taxpayer’s Cash Ledger on the Common Portal in cash. Deposits can be made in a variety of ways, including E-Payment (Internet Banking, Credit Card, Debit Card); Real Time Gross Settlement (RTGS)/National Electronic Fund Transfer (NEFT), and Over Counter Payment in branches of banks authorised to take GST deposits.
Input Tax Credit will be represented as self-assessed in monthly returns in the ITC Ledger. This ledger’s credit can only be used to pay taxes, not additional sums such as interest, fines, or fees.
12.Register of Tax Liability
The Tax Due Register displays a taxpayer’s total tax liability for the month (after netting).
13.GSTN and Authorized Banks Collaboration
The GSTN and the Bank’s Core Banking Solution (CBS) would be linked in real-time. The CPIN is promptly transferred to the Bank through an electronic string for verification and payment. The Bank will submit a challan identification number (CIN) to the Common Portal to verify payment receipt.
All cash deposits and TDS/TCS collected on behalf of the taxpayer will be documented in the cash ledger. The information will be reflected in real-time. This ledger may be used to make any GST payments.
15.Create or modify the GST Challan
A taxpayer can generate a challan for tax payment via the GSTN site. The taxpayer or his authorised agent must enter the payment information. It is possible to partially complete the challan form and then “store” it for later completion. A stored challan can be “updated” before it is finalised. Once the taxpayer has completed the form, the challan will be generated. The remitter can print the challan for his records.
It is important to note that once a challan has been produced online, it cannot be modified. He can save the challan in the middle for modification later. However, the taxpayer can only modify the challan once it has been completed and the CPIN has been created. This is one of the most important things about GST tax payments.
16.Validity Period of the Challan
A challan is valid for fifteen days after it is produced before being removed from the system. On the other hand, the taxpayer can generate a fresh challan at any time.
CPIN stands for Common Portal Identification Number (CPIN), issued during the challan-generating process. A 14-digit unique number identifies the challan. The CPIN, as previously indicated, is valid for 15 days.
18.CIN and Its Importance
Challan Identification Number is abbreviated as CIN. It’s a 17-digit code comprised of a 14-digit CPIN plus a 3-digit Bank Code. CIN is generated when authorised banks or the Reserve Bank of India (RBI) payment is received and credited to the appropriate government account. The money was received and credited to the correct government account. The approved bank sends the CIN to both the taxpayer and the GSTN.
19.If the taxpayer owes money from previous months, make GST payments in the order they are due.
Section 35(8) establishes an order of payment when a taxpayer’s Tax due exceeds the current return period. In this situation, the payment order should be as follows: first, self-assessed Tax and interest for the previous period; next, self-assessed Tax and interest for the current period; and lastly, any additional sums payable, including any confirmed requests under section 51. This is the correct order to use at all times.
Electronic Focal Point Branch is abbreviated as E-FPB. These are approved bank branches that can accept GST payments. Each approved bank shall select just one branch as its E-FPB for pan-India transactions. Under each main topic, the E-FPB must create accounts for all governments. Each State and UT government will need to create 38 accounts (one for CGST, one for IGST, and one for SGST). GST receipts received by such an E-FPB will be credited to the appropriate E-FPB account. For NEFT/RTGS transactions, the RBI will operate as the E-FPB.
21.Pre-registration of a credit card on the GSTN website is required for GST payment.
The taxpayer would be forced to pre-register his credit card from which the tax payment would be made. Credit card payments may thus be enabled without any monetary restriction to promote business convenience.
22.TDS under the GST regime
TDS stands for Tax Deducted at Source (TDS). According to Section 37, this provision is meant for the government, government undertakings, and other designated organisations that make contractual payments to suppliers above Rs.10 lakhs. When making such a payment, the competent Government/authority will subtract 1% of the total due amount and send it to the appropriate GST account.
24.A ‘TDS Deductor’ Can Recover Such TDS
- The TDS Deductor will account for such TDS in the following ways:
- Section 19 of the MGL, in conjunction with Schedule III, requires such deductors to be registered.
- They must return any TDS collected by the 10th day of the month following the month in which the TDS was collected and reported under GSTR 7.
- The deposited TDS amount will be recorded in the supplier’s electronic cash ledger.
- They must furnish the deductor with a certificate of such TDS within 5 days of deducting it, or they would be penalised Rs.100 per day, up to a maximum of Rs.5000.
25.Tax Collected at Source (TCS)
This regulation solely applies to E-Commerce Operators as specified in MGL section 43C. Every E-Commerce Operator shall withhold a percentage (to be announced later on the GST Council’s suggestion) of the amount owing from him to the supplier when making actual payment to the provider.
The withheld amount must be put into the proper GST account by such E-Commerce Operator by the 10th of the next month. The TCS amount will be entered into the supplier’s electronic cash ledger.
Frequently Asked Questions:
1.Who is liable to pay GST?
- All the service providers or distributors of goods have to pay GST.
2.Can a person pay GST in installments?
- If someone cannot pay the entire amount of GST at a time, a letter can be written requesting the commissioner to allow the person to pay GST in instalments.
3.Is GST a form of direct Tax?
- GST is considered to be an indirect tax. Income tax is a direct tax.
These are the top 25 points that are the most important points about Tax Payments under GST. This list will help people understand what Tax Payments are under GST and whether one needs to pay taxes for GST payments.