Payments

WHAT ARE PAYMENTS TO BE MADE UNDER GST?

Under GST the tax to be paid is mainly divided into 3 –

• IGST – To be paid when interstate supply is made (paid to center)
• CGST – To be paid when making supply within the state (paid to center)
• SGST – To be paid when making supply within the state (paid to state)

CIRCUMSTANCES	CGST	SGST	IGST
Goods sold from Delhi to Bombay	NO	NO	YES
Goods sold within Bombay	YES	YES	NO
Goods sold from Bombay to Pune	YES	YES	NO

 

Apart from the above payments a dealer is required to make these payments –

• Tax Deducted at Source (TDS) – TDS is a mechanism by which tax is deducted by the dealer before making the payment to the supplier

For example – A government agency gives a road laying contract to a builder. The contract value is Rs 10 lakh. When the government agency makes payment to the builder TDS @ 1% (which amounts to Rs 10,000) will be deducted and balance amount will be paid.

• Tax Collected at Source (TCS) – TCS is mainly for e-commerce aggregators. It means that any dealer selling through e-commerce will receive payment after deduction of TCS @ 2%.

This provision is currently relaxed and will not be applicable to notified by the government.

• Reverse Charge – The liability of payment of tax shifts from the supplier of goods and services to the receiver.
• Interest, Penalty, Fees and other payments

• HOW TO CALCULATE THE GST PAYMENT TO BE MADE?

  Usually, the Input Tax Credit should be reduced from Outward Tax Liability to calculate the total GST payment to be made.

  TDS/TCS will be reduced from the total GST to arrive at the net payable figure. Interest & late fees (if any) will be added to arrive at the final amount.

  Composition scheme – Applicable GST Rates
  Type of Business	CGST	SGST	Total
  Manufacturer & Traders (Goods)	0.5%	0.5%	1.0%
  Restaurants not serving alcohol	2.5%	2.5%	5.0%
  Other service providers*	3.0%	3.0%	6.0%

  Also, ITC cannot be claimed on interest and late fees. Both Interest and late fees are required to be paid in cash. The way the calculation is to be done is different for different types of dealers –

  Regular Dealer - A regular dealer is liable to pay GST on the outward supplies made and can also claim Input Tax Credit (ITC) on the purchases made by him. The GST payable by a regular dealer is the difference between the outward tax liability and the ITC. 
  Composition Dealer - The GST payment for a composition dealer is comparatively simpler. A dealer who has opted for composition scheme has to pay a fixed percentage of GST on the total outward supplies made. GST is to be paid based on the type of business of a composition dealer.

  WHO SHOULD MAKE THE PAYMENT?

  These dealers are required to make GST payment –

  • A Registered dealer is required to make GST payment if GST liability exists.
  • Registered dealer required to pay tax under Reverse Charge Mechanism (RCM).
  • E-commerce operator is required to collect and pay TCS
  • Dealers required deducting TDS

  WHEN SHOULD GST PAYMENT BE MADE?

  GST payment is to be made when the GSTR 3 is filed i.e by 20th of the next month.

   

  HOW TO MAKE GST PAYMENT?

  GST payment can be made in 2 ways

  • Payment through Credit  Ledger

  The credit of ITC can be taken by dealers for GST payment. The credit can be taken only for payment of Tax. Interest, penalty and late fees cannot be paid by utilizing ITC.

  • Payment through Cash Ledger

  GST payment can be made online or offline. The challan has to be generated on GST Portal for both online and offline GST payment. Where tax liability is more than Rs 10,000, it is mandatory to pay taxes Online.

  WHAT IS THE PENALTY FOR NON-PAYMENT OR DELAYED PAYMENT?

  If GST is short paid, unpaid or paid late interest at a rate of 18% is required to be paid by the dealer. Also, a penalty to be paid. The penalty is higher of Rs. 10,000 or 10% of the tax short paid or unpaid.

   

FAQ