All You Need to Know About GST Payment: Modes & Process

Goods and Services Tax payment is the remittance of the GST amount to be paid by a business regularly. It is one of the most important requirements for a company to remain compliant.

According to the government guidelines, each registered regular taxpayer is required to pay GST on the 20th of each month, including the submission of the GSTR-3B return.

In this blog, we will learn

GTS payment for different types of taxpayers

The GST payment process is largely the same for all types of taxpayers under GST. If you maintain a sufficient balance in the electronic cash ledger, payment is not required.

To put it another way, if there is an insufficient cash balance, the taxpayer has to use a GST challan to deposit money into the cash ledger using one of the recommended payment modes.

Outlined below is a summary of the GST payment process for different types of taxpayers:

Regular taxpayer

When filing GSTR-3B, regular taxpayers must fill the PMT-06 challan to make any GST payments to the electronic cash ledger. The specifics will be included in GSTR-3B.

They can also create a GST challan and pay for it before or after logging in, or while filing GSTR-3B returns.

Quarterly taxpayer

These are the taxpayers who have chosen the GST QRMP (Quarterly Return filing and Monthly Payment) scheme which was introduced during the Jan-Mar 2021 quarter.

As a result, the majority of quarterly GSTR-1 filers have been moved into the scheme. Their payment procedure differs slightly from that of the remainder of the taxpayers.

They must deposit tax directly using the PMT-6 during the first 2 months of a quarter and make the payment while filing GSTR-3B in the third month.

Under the QRMP scheme, a taxpayer can file GSTR-1 and GSTR-3B after the end of the quarter.

The GST payments shall be made by the 25th of the following month for the first and second months of a quarter.

For such taxpayers, when filling out the form PMT-06, they should select the ‘Monthly payment for quarterly return’ option as the reason and one of two payment methods – fixed sum or self-assessment.

Taxpayers who file no GST returns

These taxpayers have had no sales, purchases, or tax liability for the applicable tax period, whether monthly or quarterly. They are not required to use a challan or make any GST payment.

Composition taxable individuals

These taxpayers must summarise their sales/turnover information for the quarter in the CMP-08 challan and pay tax.

GST payment process

The taxpayer can pay GST online, offline, or through LEDGERS. GST is a tax levied on the goods or services supplied, or both, with a few exceptions for a few identified goods and services.

The GST Council provides taxpayers with options for paying taxes on the supply of goods or services rendered.

GST will also function as a destination-based consumption tax, meaning that the tax will be levied based on where goods and services are ultimately consumed.

In this section, let us understand the GST payment process and the different options available for the same.

Ledgers for GST payment

Every registered dealer will be required to maintain three ledgers in the GST payment portal for the aim of GST tax payment, which is the first step in the GST payment process. The three ledgers are as follows:

Electronic tax liability register

All obligations of a person towards tax, interest, penalty, late fee, or any other amount will be debited in this register.

Electronic cash ledger

Every deposit made by a person for tax, interest, penalty, late fee, or any other amount is credited to this account.

Electronic credit ledger

A person’s self-assessed and claimed input tax credit in Form GSTR-2 will be credited here. This can only be used by a single person, and it cannot be used to settle other amounts such as interest, late fees, and so on.

Set-off for GST payment ledgers

A taxpayer can use the balance managed in the Electronic cash ledger and Electronic credit ledger to pay for the liabilities seen in the Electronic tax liability register.

When liability is satisfied:

• The amount paid will be credited to the Electronic Tax Liability Register.
• The credit used to make the payment will be deducted from the electronic credit ledger.
• The amount of deposit used to make the payment will be deducted from the electronic cash ledger.

Important forms for GST payment

GST payment modes

Explained are the two GST payment modes:

Online mode of GST payment through NEFT/RTGS

In the case of an online payment made through NEFT/RTGS:

1. Select NEFT/RTGS from the ‘Payment Modes’ menu.
2. Select the remitting bank from the ‘Remitting Bank’ menu.
3. Click on the ‘Challan Generator’ button.
4. The box for OTP Authentication appears. The taxpayer whose GSTIN/UIN/TRPID/TMPID is entered enters the OTP received on their registered mobile number in the ‘Enter OTP’ field.
5. Click on the ‘Proceed’ button to continue.
6. The challan is generated by the GST Portal.
7. Take a print of the Challan and go to the chosen bank. Furthermore, the GST Portal also generates the Mandate form.
8. Pay with a cheque from your account at the chosen bank/branch. You can also pay via account transfer.
9. The transaction will be processed by the bank, and the RBI will confirm it within two hours.
10. You can link the UTR with the NEFT/RTGS CPIN on the GST Portal after you have received the Unique Transaction Number (UTR) on your registered e-mail or mobile number. Go to Challan History and select the CPIN option. Input the UTR and connect it to the NEFT/RTGS payment.
11. The GST Portal will update the status of the taxpayer’s payment once it receives confirmation from the bank.
12. The GST Portal will then apply the payment to the appropriate minor/major head in the Electronic Cash Ledger.

Offline GST payment at the bank

In the case of an offline payment made through a bank:

1. Select ‘Over the Counter’ from the Payment Modes menu.
2. Choose the name of the bank in which cash or an instrument is to be deposited.
3. Choose Cash/Cheque/Demand Draft as the instrument type.
4. Click on the ‘Challan Generator’ button.
5. The challan is generated after you click the generate challan button.
6. Take a print of the GST challan and go to the chosen bank.
7. Within the validity period of the GST challan, pay with cash, check, or demand draught.
8. The GST portal will update the status of the taxpayer’s payment once it receives confirmation from the bank.

On a concluding note

Simply put, the GST payment process is critical for any business to remain compliant. To make GST payments online on time and continue their business in a hassle-free manner, every business must be aware of the required GST payment formats, make the correct GST payment calculations, abide by the GST payment dates, and correctly pass the correct GST payment vouchers in their books.

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