Payment of Tax | Taxation for CA Intermediate PDF Download

 Page 1


 
GST Payments and Refunds 
Once GSTR 1 and GSTR 2 are filed a dealer is required to file GSTR 3 and make GST Payment. 
Also if a refund is required to be claimed the same can be done by filing relevant refund related 
forms. 
 
A. Payments 
1. 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 Chandigarh NO NO YES 
Goods sold within Delhi YES YES NO 
Goods sold from Bangalore to Mysore 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 
lakhs. 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 (who owns and –
manages an electronic platform). It means that any dealer selling through e-commerce will 
receive payment after deduction of TCS @ 2%. 
 
2. 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. 
Page 2


 
GST Payments and Refunds 
Once GSTR 1 and GSTR 2 are filed a dealer is required to file GSTR 3 and make GST Payment. 
Also if a refund is required to be claimed the same can be done by filing relevant refund related 
forms. 
 
A. Payments 
1. 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 Chandigarh NO NO YES 
Goods sold within Delhi YES YES NO 
Goods sold from Bangalore to Mysore 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 
lakhs. 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 (who owns and –
manages an electronic platform). It means that any dealer selling through e-commerce will 
receive payment after deduction of TCS @ 2%. 
 
2. 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. 
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. 
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% 
Service Providers are not eligible for Composition Scheme.  
3. Who should make the GST payment and when? 
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 
• GST payment is to be made when the GSTR-3 is filed i.e. by 20th of the next month. 
 
4. What are the electronic ledgers? 
These ledgers are maintained on the electronically on GST Portal. 
 
Types of Electronic Ledgers 
 
  
 
            Cash Ledger                              Credit Ledger                          Liability Ledger 
  
Page 3


 
GST Payments and Refunds 
Once GSTR 1 and GSTR 2 are filed a dealer is required to file GSTR 3 and make GST Payment. 
Also if a refund is required to be claimed the same can be done by filing relevant refund related 
forms. 
 
A. Payments 
1. 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 Chandigarh NO NO YES 
Goods sold within Delhi YES YES NO 
Goods sold from Bangalore to Mysore 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 
lakhs. 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 (who owns and –
manages an electronic platform). It means that any dealer selling through e-commerce will 
receive payment after deduction of TCS @ 2%. 
 
2. 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. 
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. 
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% 
Service Providers are not eligible for Composition Scheme.  
3. Who should make the GST payment and when? 
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 
• GST payment is to be made when the GSTR-3 is filed i.e. by 20th of the next month. 
 
4. What are the electronic ledgers? 
These ledgers are maintained on the electronically on GST Portal. 
 
Types of Electronic Ledgers 
 
  
 
            Cash Ledger                              Credit Ledger                          Liability Ledger 
  
This ledger will reflect all 
deposits made in cash, and 
TDS or TCS made on 
account of the taxpayer. This 
ledger can be used for 
making any payment on 
account of GST 
ITC as self-assessed in 
monthly returns will be 
reflected here. The credit in 
this ledger can be used to 
make payment of tax only 
and no other amounts such as 
interest, penalty, fees etc. 
The total tax liability of a tax 
payer (after netting) for the 
particular month will be 
shown here. This ledger will 
be automatically displayed 
on a GST Tax payer’s 
dashboard. 
5. 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 E- ? FPB
E-FPB stands for Electronic Focal Point Branch. They are branches of authorized banks which 
are authorized to collect payment of GST. Each authorized bank will nominate only one branch 
as its E-FPB for PAN India transactions. The E-FPB will have to open accounts under each 
major head for all governments. Total 38 accounts (one each for CGST, IGST and one each for 
SGST for each State/UT Govt.) will have to be opened. Any amount received by such E-FPB 
towards GST will be credited to the appropriate account held by such EFPB. 
CPIN 
It is an indication that the payment has been realized and credited to the appropriate government 
account. CPIN stands for Common Portal Identification Number given at the time of 
generation of challan at  portal. It is a 14 digit unique number to identify the challan and GST 
before making GST payment. Whereas, CIN stands for Challan Identification Number  and
is a 17 digit unique number of the challan generated after making GST payment.