Tax Payment Procedure under GST?

Now that the GST will soon be launched, an important point to note is the process of tax payment. First, it is essential to understand if the individual or entity is eligible for GST tax or not. There are various conditions which the taxpayer can check to understand the criteria for eligibility and payment of GST tax.

Tax payment is critical as late payment can attract penalty and even cancellation of the business or ventures by individuals or entities. Below here is a brief introduction on the GST tax payment in India.

Mode of Payment

  • Internet Banking/Credit Cards/Debit Cards
  • Over the counter payment

CGST, IGST & SGST, all three forms of Goods & Service tax can be paid via both online and offline mode. An individual can use their credit card, debit card or net banking to pay for taxes under GST in the online mode.

For offline mode, individuals can pay taxes via cheque across all authorized banks in India. Individuals can also pay cash across authorized banks for GST tax payment. Another point to note here is that for paying taxes under all forms of GST, you will require one common challan. This Challan will be used for all payments. Alternatively, the government also allows NEFT & RTGS payment facilities for settling payments of SGST, CGST & IGST. The IT framework GSTN has been given the task of constructing and maintaining the payment collection structure for the GST.

The detailed process of tax payment under GST is described as follows;

  1. Once draft challan is created, the applicant (or taxpayer) will have to fill tax details for payment. Agreed by RBI representative, the RBI will act as recipient for the transferred amount via RTGS/NEFT.
  2. This eliminates the requirement of linking up with authorized banks for receiving payments and after that transferring to RBI. RBI will only act as authorized bank. The taxpayer will then be choosing payment mode from authorized bank. The generated challan will contain a unique CPIN (Common Portal Identification Number) code.
  3. A generated challan is frozen and cannot be modified. The validity of the CPIN is for seven days. Within this 7 day validity, the tax amount needs to be tendered. However, the CPIN will be live for 30 days with RBI. It is important to note here that the taxpayer who has used the CPIN code more than twice after the 7 day validity period will be barred.
  4. Once the challan is successfully generated, it is available across the taxpayer’s account dashboard. It can be printed or downloaded. Thus the taxpayer will be able to either print the challan offline or download it directly from the portal.

GST Payment Through NEFT/RTGS

Apart from challan, the GSTN will be bearing RTGS/NEFT mandate. NEFT/RTGS mandate will be generated by GSTN in the ‘Account Name’ field. There will be an important disclaimer across the copy of challan. This disclaimer indicates that the transaction should be between taxpayers and their authorized banks only. Then only the payment shall be considered as received by the GST portal and by the government. The payments in these modes will be accepted against cheques only. The GST Portal will not allow any cash payments for tax payments under GST (under the RTGS/NEFT mode).

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