Category: Payment of GST

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What is the procedure for payment of tax for a casual taxable person or non-resident taxable person who is required to pay tax in advance for obtaining registration

As GSTIN will not be available with the casual taxable person or non-resident taxable person required to pay tax in advance for obtaining registration, they will be provided a temporary identification number using which the person can deposit estimated tax liability.

(ICAI FAQ PUBLICATIONS 06-09-2017 TAX PAYMENTS, INTEREST, PENALTY AND OTHER AMOUNTS: FAQ NO. 27)

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Is there any order in which liability of a person shall be discharged or it can be appropriated as per the convenience of the tax payer

No, every taxable person shall discharge his tax and other dues in the following order:
(a) self-assessed tax, and other dues related to returns of previous tax periods; b) self-assessed tax, and other dues related to return of current tax period;
(c) any other amount payable under the Act or the rules made thereunder including the demand determined under section 66 or 67.
Note 1:“tax dues” means the tax payable under this Act and does not include interest, fee and penalty.
Note 2:“other dues” means interest, penalty, fee or any other amount payable under the Act or the rules made there under.

(ICAI FAQ PUBLICATIONS 06-09-2017 TAX PAYMENT, INTEREST, PENALTY AND OTHER AMOUNTS: FAQ NO. 23)

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What is the manner/order of utilization of input tax credit

The manner/order of utilization of input tax credit is as follows:
 The amount of IGST credit in the electronic credit ledger can be utilized in the following order:
IGST against IGST-CGST-SGST/UTGST
Eg: If IGST credit available is ` 100, IGST liability is ` 50, CGST liability is ` 40 and SGST/UTGST liability is ` 30. The credit will be utilized as follows: In this case the balance of SGST/UTGST may be paid using SGST/UTGST credit or by cash.
 CGST against CGST-IGST
 SGST/UTGST against SGST-IGST
 SGST/UTGST against CGST or CGST against SGST/UTGST – Not allowed

(ICAI FAQ PUBLICATIONS 06-09-2017 TAX PAYMENTS, INTEREST, PAYMENT AND OTHER AMOUNT: FAQ NO.22)

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Can one use input tax credit for payment of tax under reverse charge basis

No, the amount available in the electronic credit ledger may be used for making any payment towards ‘output tax’. Further, the definition of output tax u/s 2(82) specifically excludes tax payable under reverse charge basis. Therefore, input tax credit cannot be used for payment of tax under reverse charge basis.

(ICAI FAQ PUBLICATIONS 06-09-2017 TAX PAYMENTS, INTEREST PENALTY AND OTHER AMOUNTS: FAQ NO. 21

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Can one use input tax credit for payment of interest/penalty

No, as per Section 49(4) of the CGST Act, 2017 the amount available in the electronic credit ledger may be used for making any payment towards ‘output tax’ payable only. As per Section 2(82) of the CGST Act, 2017, ‘Output tax’ in relation to a taxable person, means the CGST/SGST chargeable under this Act on taxable supply of goods and/or services made by him or by his agent and excludes tax payable by him on reverse charge basis. Therefore, input tax credit cannot be used for payment of interest/penalty.

(ICAI FAQ PUBLICATIONS 06-09-2017 TAX PAYMENT, INTEREST, PENALTY AND OTHER AMOUNTS : FAQ NO.20)

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What are the differences between electronic cash ledger and electronic credit ledger

Electronic cash ledger Electronic credit ledger
1.Can be used for payment of tax, interest, penalty and other amounts Can be used only for payment of output tax
2.Credit to the ledger will be through payment vide Challans Credit to the ledger will be through input tax credit claimed as per FORM GSTR-2 (inward return)
3.Refund for excess balance in the cash ledger can be applied through GSTR-03 or 04 or 07 Refund for excess balance in credit ledger may be refunded only though the forms specified

(ICAI FAQ PUBLICATIONS 06-09-2017 TAX PAYMENTS, INTEREST, PENALTY AND OTHER AMOUNTS : FAQ NO. 19)