Every registered regular tax payer has to furnish GST returns on a monthly basis and pay the tax due by the 20th of the month. If a taxpayer does not pay the tax due, interest on the tax due will be applicable from the day on which the tax was due to pay.
If a person furnishes a monthly return without paying the tax due, the return furnished will consider as an Invalid Return. Without furnishing the return for a month and paying the tax due, the subsequent month’s return cannot furnish. Hence, it is necessary to understand how to pay the tax liabilities under GST in order to avoid the penalties for non-payment of tax.
All liabilities of a person towards tax, interest, penalty, late fee or any other amount will debut here.
2. Electronic cash ledger
Every deposit made by a person towards tax, interest, penalty, late fee or any other amount will credit here.
3. Electronic credit ledger
Input tax credit, as self-assessed and claimed in Form GSTR-2 by a person, will credit here. This can only use by a person for paying tax, and not other amounts such as interest, late fee, and so on.
To pay the liabilities shown in the Electronic tax liability register, a person can use the balance in the Electronic cash ledger and Electronic credit ledger. When a liability is paid,
b)The Electronic credit ledger will debt by credit used for making the payment.
c)The Electronic cash ledger will debt by the amount of deposit used for making the payment.
Let us understand this with an illustration.
2. Deposit money in the Electronic cash ledger to pay the balance tax liability
To pay the balance tax liability, Ravindra Apparel should deposit the tax liability amount in the Electronic cash ledger. For this, Ravindra Apparel should:
a. Generate challan for making the payment
Challan for the payment can generate from the GST portal using Form GST PMT-06. The details of the amount to deposit towards tax, interest, penalty, fees or any other amount should enter in the challan. The challan generates will valid for 15 days.
b. Make the payment using the given modes
a)Payment can do using the following modes:
b)Internet banking through authorized banks
c)Credit card or debit card through authorized banks
National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) from any bank
Over the counter (OTC) payment through authorized banks for deposits up to Rs.10,000 per challan per tax period, by cash, cheque or Demand Draft (DD)
Note: If the payment is to be made by NEFT or RTGS, a mandate form will generate along with the challan on the GST portal. The mandate form has to submit to the bank from where the payment is made. The mandate form will valid for 15 days.
c. Generation of CIN and credit to Electronic cash ledger
Once the amount paid by a dealer is credited to the concerned government account, a Challan Identification Number (CIN) will generate and the same will mention in the challan in the GST portal. On receipt of the CIN, the amount paid will credit to the person’s Electronic cash ledger.
In our illustration, Ravindra Apparel deposits Rs.60,000 to pay the balance tax liability on 20th December ’17. Once the payment is credited, the amount will utilize for paying the balance CGST, SGST, and IGST liabilities. After payment of the tax due, Ravindra Apparel’s ledgers appear as shown below: