Payment Modes and Ledgers under GST Act, 2017:

• Electronic Cash Ledger (ECL) under GST Act, 2017:
  • Created on the GST portal for each taxpayer.
  • Used for paying tax, interest, penalty, fees, and other amounts payable under the Act.
  • Deposits are made electronically (online banking, credit/debit cards, NEFT, RTGS).
  • Deposited amounts are credited to the ECL immediately.
• Electronic Credit Ledger (ECL) under GST Act, 2017:
  • Reflects input tax credit (ITC) claimed by a registered person.
  • ITC is credited to the ECL after verification by tax authorities.
  • ITC balance can be used for paying output tax.

Payment Process under GST Act, 2017:

1. File GST Returns under GST Act, 2017:File GSTR-1 (Sales), GSTR-3B (Monthly/Quarterly Summary), and other applicable returns by the due date.
2. Calculate Tax Liability under GST Act, 2017:Based on filed returns and applicable rates, calculate tax payable (including CGST, SGST, and IGST).
3. Make Payment under GST Act, 2017:
   • Within due date under GST Act, 2017:Use the ECL to make timely payments. Late payment attracts interest and penalty.
   • Outside due date under GST Act, 2017:File late return and pay tax, interest, and penalty with applicable forms (GSTR-4, GSTR-5, GSTR-9).
   • Interest calculation under GST Act, 2017:Interest accrues on unpaid tax @ 18% per annum from the due date of payment.
   • Penalty calculation under GST Act, 2017:
     • For delay in filing returns: Late filing fee of Rs. 100 per day (maximum Rs. 5,000 per return).
     • For short payment of tax: Penalty @ 10% of the tax amount (subject to a minimum of Rs. 1,000).
     • For non-payment of tax or fraudulent evasion: Penalty @ 100% of the tax amount (subject to a minimum of Rs. 10,000).

Important Points under GST Act, 2017:

• Advance Tax Payment under GST Act, 2017:Optionally, taxpayers can make advance tax payments (challan type 0043 for CGST and SGST, 0044 for IGST) to be adjusted against future tax liabilities.
• Refunds under GST Act, 2017:If ITC exceeds output tax liability, claim refund through GSTR-9 (annual return).
• Correction of Errors under GST Act, 2017:Use Form GST PMT-03 to rectify errors in payments or returns.
• Compliance under GST Act, 2017:Adhere to payment deadlines and GST rules to avoid penalties and interest charges.

EXAMPLE

Scenario under GST Act, 2017:

• M/s ABC Ltd., a registered taxpayer under GST, is liable to pay tax of ₹100,000 for the month of January 2024.
• The due date for filing the GSTR-3B return and paying the tax is 20th February 2024.
• M/s ABC Ltd. files the GSTR-3B return on 21st February 2024, one day late.
• They also realize they made an error in the return, under-reporting the tax liability by ₹20,000.

Calculation of Tax, Interest, Penalty and Other Amounts under GST Act, 2017:

1. Tax Liability under GST Act, 2017: ₹100,000 (original) + ₹20,000 (under-reported) = ₹120,000
2. Interest under GST Act, 2017:
   • Late filing of GSTR-3B attracts a late filing fee of ₹100 per day, subject to a maximum of ₹5,000.
   • In this case, the late filing fee is ₹100 per day for 1 day = ₹100.
   • Interest on late payment of tax is calculated at 18% per annum from the due date (20th February) to the date of payment.
   • Assuming the payment is made on 23rd February, the interest for 3 days is ₹120,000 * 18% * 3/365 = ₹102.74.
3. Penalty under GST Act, 2017:
   • For late payment of tax, a penalty of 10% of the tax amount due is levied, subject to a minimum of ₹1,000.
   • In this case, the penalty is ₹120,000 * 10% = ₹12,000 (minimum of ₹1,000 does not apply here).
   • However, there is a late payment penalty reduction scheme available, which can reduce the penalty by 50% if the payment is made within a specified timeframe. Let’s assume M/s ABC Ltd. avails this scheme and the reduced penalty is ₹6,000.
4. Other Amounts under GST Act, 2017:
   • There might be additional fees or charges depending on the mode of payment used (e.g., online payment gateway charges).

Total Payment under GST Act, 2017:

• Tax: ₹120,000
• Interest: ₹102.74
• Penalty: ₹6,000
• Other Charges: (Assuming ₹50)

Total Payment = ₹126,152.74

FAQ QUESTIONS

Payment of Tax under GST Act, 2017:

• How are taxes paid under GST Act, 2017?
  • Taxes are paid electronically through the GST portal using challan forms.
  • Separate challans are used for CGST, SGST & IGST.
• What are the due dates for filing returns and paying taxes under GST Act, 2017?
  • Due dates vary based on taxpayer category (e.g., monthly filers, quarterly filers). Check the GST portal for specific dates.
• Can I pay tax in installments under GST Act, 2017?
  • Yes, in certain cases, you can request permission from the Commissioner for payment in installments. Interest will apply.

Interest under GST Act, 2017:

What is the interest rate for late tax payment under GST Act, 2017?

• 18% per annum for regular cases.
• 24% per annum for undue ITC claims or tax reduction.

• When does interest start accruing under GST Act, 2017?
  • Interest accrues from the due date of tax payment till actual payment.

Penalty:

• What are the different types of penalties under GST Act, 2017?
  • Late fee for late filing of returns.
  • Penalty for non-payment of tax, short payment, or incorrect information.
  • Penalty for specific offenses like issuing fake invoices.
• What are the rates of penalties under GST Act, 2017?
  • Penalties vary depending on the offense, ranging from Rs.10,000 to 100% of tax amount.

Other Amounts under GST Act, 2017:

• How to claim Input Tax Credit (ITC) under GST Act, 2017?
  • ITC is claimed through GSTR-3B return by uploading invoices received from suppliers.
• How to get a refund of excess tax payment under GST Act, 2017?
  • File a refund application through the GST portal. Interest is payable on delayed refunds.

CASE LAWS

The GST Act, 2017, along with its rules and regulations, lays down the framework for payment of tax, interest, penalty, and other amounts. However, various interpretations and disputes arise in specific situations. Here are some notable case laws relevant to your query:

Payment of Tax under GST Act, 2017:

• M/s. Karvy Consultants (P) Ltd. vs. The Union of India & Ors. (2022):This case clarified that ITC cannot be used to offset tax liability arising from past periods before GST registration.

Interest under GST Act, 2017:

• M/s. Mcleod Russel India Ltd. Vs. CCE, Kolkata-I (2022):This case dealt with the levy of interest on delayed payment of tax due to classification dispute. The court held that interest can be levied only if the classification adopted by the taxpayer is demonstrably incorrect.
• M/s. Jindal Stainless Ltd. Vs. CCE, Chandigarh (2020):This case clarified that interest cannot be charged on the amount of penalty levied.

Penalty under GST Act, 2017:

• M/s. Hero MotoCorp Ltd. Vs. Union of India & Ors. (2022):This case highlighted the principle of proportionality while imposing penalties. The court held that the penalty should be reasonable and commensurate with the nature of the offense.
• M/s. Dharni Fabrics Ltd. Vs. CCE, Chandigarh (2020):This case emphasized the requirement of a proper show-cause notice before imposing penalties.

Other Amounts under GST Act, 2017:

• M/s. KPR Mills Ltd. Vs. Union of India & Ors. (2022):This case dealt with the levy of late fee for delayed filing of returns. The court held that the fee cannot be levied if the delay is due to technical glitches in the GST portal.

Disclaimer under GST Act, 2017: This is not an exhaustive list, and the specific applicability of these cases to your situation may vary. It is highly recommended to consult with a tax professional for tailored advice considering the facts and circumstances of your case.