With the onset of GST, many changes have been introduced in the taxation system of India. Just how many of the old taxes have been replaced with one tax i.e., Goods and Services Tax, even the payment process of taxes has changed. Now, it is mandatory for every regular tax payer to furnish GST returns on a monthly basis and pay the due taxes by the 20th of every month. Incase a tax payer does not pay the due taxes, the due taxes will be penalised as interest starting from the date the due tax was to be paid.
It is very important to learn about the payment process under GST, because in cases where a monthly return is being furnished without paying the due taxes, then that return will be considered as an Invalid Return. Even the subsequent month’s return cannot be furnished until the due tax payment is not cleared. Thus, it is mandatory for every registered dealer to maintain three ledgers in the GST portal, for payment of tax.
1. Electronic Tax Liability Ledger:
Electronic Tax Liability Ledger will display all liabilities of a person under major heads towards tax such as interest, penalty, demand notice and these payments can be made by using Input Tax Credit which is available in the Electronic Credit Ledger.
2. Electronic Cash Ledger:
For any payment that is being made towards tax, interest, late fee and penalty will be credited here. It will also display the balance information under various major-minor heads and also if any payment refunds are to be received by the taxpayer would reflect in this ledger.
3. Electronic Credit Ledger:
As mentioned under Electronic Tax Liability Ledger, all tax liabilities being paid by a person can be made by using ITC which is available under Electronic Credit Ledger, and it can claimed in form GSTR-2. Please note, this can only be used by a person for paying tax, and not other amounts such as interest, late fee etc.
List of different GST Payment Forms
Please also note that in cases where any amount has been deducted due to the TDS/TCS/Reverse charge and composition scheme, it shall be debited to the electronic cash ledger and credited to the electronic tax liability register accordingly.
In conclusion, all the payments have to be made by either using the input tax credit available in the electronic credit ledger, or through the electronic cash ledger.