GST is an indirect tax which got implemented by the Ministry of Finance in July 2017. It is a multi-stage tax system and comprehensive in nature. It replaced a pool of taxes such as Value Added Tax, Excise Duty, Service tax, Gift tax, and so on, thus bringing the tax structure into a single umbrella and as a result eliminates the cascading effect of taxes, popularly known as double taxation.

It is a consumption-oriented tax. The person who finally consumes the product or service bears the liability of the tax. GST is branched into further two types: CGST + SGST and IGST. The former is applicable to the intrastate supply of goods and services. The latter is applicable to inter-state supply and Import of goods and services.

The exports are nil-rated. Every registered member with GST is allotted a unique identity number. A separate electronic ledger is maintained to account for GST tax, Interest on GST, Penalty for any cases in terms of GST payment.

GST challans are monthly-based payments. A challan will be valid for the next fifteen days after its generation and thereafter it will be purged from the system automatically. However, the taxpayer can generate another challan at his/her requirement.

As per certain recent amendments, ITC shall be available as per the invoices uploaded by the respective suppliers either in their GSTR-1 or by using the Invoice Furnishing Facility (IFF). The recipients can claim a provisional input tax credit in GSTR-3B to the extent of 5% instead of earlier 10% of the total ITC available in GSTR-2B for the month. Certain taxpayers cannot make GST payments from their electronic credit ledger in excess of 99% of the total tax liability for the tax period as per a new rule 86B.

How to do the calculation of GST?

While calculating GST challans, certain factors need to be taken into consideration:

  • Gross GST liability is the total amount of tax to be paid by the registered businesses.
  • Tax Deducted at Source (TDS) is the tax that the dealer deducts before making payment to the supplier.
  • Input Tax Credit (ITC), here the GST burden on a supplier’s output is decreased to the extent GST has been paid on inputs purchased by the registered business.

Thus, Net GST Payable = Gross GST -TDS+ITC.

When the liability to pay GST does arise?

Section 12 says ‘at the time of supply of Goods’ and as explained in Section 13says ‘at the time of supply of services. The time is generally the earliest of any of the three following events:

  • Receiving payment,
  • Issuance of the invoice,
  • Completion of supply.

What are the features of GST Challans?

The important features of making payment of GST challans are as follows –

When is the payment of taxes to be made by the Supplier?

Payment of taxes by the normal taxpayer is to be done on monthly basis by the 20th of the succeeding month. Cash payments will be first deposited in the Cash Ledger and the taxpayer shall debit the ledger while making payment in the monthly returns and shall reflect the relevant debit entry number in his return. As mentioned earlier, payment can also be debited from the Credit Ledger. Payment of taxes for the month of March shall be paid by the 20th of April. Composition taxpayers will need to pay tax on a quarterly basis.

What are the methods to do GST payments?

  • Using balance in the Credit Ledger:

A GST registered business/individual can make GST payment using the credit ledger balance available in lieu of input tax credit received. This balance cannot however be used for making other GST-related payments such as late fees, interest, etc.

  • Using Cash Ledger Balance:

The taxpayer can also use cash ledger balance to pay GST dues via either the online route or the offline route. Under currently applicable rules, GST dues have to be mandatorily paid online if the total tax payable is over Rs. 10,000. A GST payment challan is mandatory when making GST payments.

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