FEATURES OF GST PAYMENT PROCESS - Handbook of GST Law & Procedures (CBIC) [October 2024] - GST

14. FEATURES OF GST PAYMENT PROCESS 14.1 The payment processes under GST Act have the following features: Electronically generated challan from GSTN Common Portal in all modes of payment and no use of manually prepared challan; 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. 14.2 As provided under Section 49 of the CGST Act, 2017, payment can be done by the following methods: (i) Through debit of Credit Ledger (Input Tax Credit ledger) of the taxpayer maintained on the Common Portal - Only Tax can be paid. Interest, Penalty and Fees cannot be paid by debiting the Credit Ledger. taxpayers 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 (reflecting all deposits made in cash, and TDS/TCS made on account of the taxpayer) maintained on the Common Portal. Money can be deposited in the Cash Ledger by different modes, viz, 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. 14.3 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. 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 taxpayers need to pay tax on quarterly basis. 14.4 A valid return is a return on which self-assessed tax has been paid in full. 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. 14.5 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 (which reflects the total tax liability of a taxpayer (after netting) for the particular month). 14.6 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. 14.7 Section 49(8) of CGST Act, 2017 prescribes an order of payment where the taxpayer has tax liability outstanding beyond the current return period liability. In such a situation, the order of payment to be followed mandatorily is: First self-assessed tax and other dues for the previous period has to be paid; Then self-assessed tax and other dues for the current period has to be paid; and Finally, any other amounts payable, including any confirmed demands under Section 73 or 74 (Inserted by section 115 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.) [or Section 74A] of the CGST Act, 2017 (Demands). 14.8 Any payment required to be made by a person who is not registered under the Act, shall be made on the basis of a Temporary Identification Number generated through the Common Portal.