Demystifying Goods and Service Tax – Draft Payment Rules

Under the Central Excise, the concept of maintaining the mandatory registers have been done any over a decade back still we are maintaining them in the same formats like RG 23 A /C – Part I / II expect for RG 1 (Production Register and RG 23 D (trading).  When these records are replaced it did not mean that they are totally scrapped but private records can be maintained as long as the required information is present in the report any format but still the range officials even today insist for the reports in old formats only. Hopefully, this practice will go way once the GST is implemented.

In GST it is stated that the key record / reports maintained by the common portal as the taxpayer is expected to upload each and every transaction data on the common portal. The returns / reports to be maintained under GST on the common portal are

  • Electronic Tax Liability Register
  • Electronic Credit Ledger
  • Electronic Cash Ledger

Rule 1 – Electronic Tax Liability Register

An Electronic Tax Liability register will be maintained on the common portal as per Sub-Section 7 and section 35 of the Model GST Law in the FORM GST PMT-1 and it will contain all the amounts payable by the taxable person.

The Electronic Tax Liability Register will be debited with the following

  • amount of tax payable,
  • interest, late fee or
  • amount of tax payable along with interest on account of mismatch of credit based on provisions of Section 29 or Section 29A or section 43C.
  • any other amount payable by the tax payer or directed by the board on account of any proceeding’s carried out under the GST Act

The Electronic Tax Liability Register will be credited with the following

  • Amount deducted under Section 37 (Tax Deduction at Source)
  • Amount collected under Section 43 C (Tax Collection at Source)
  • Amount payable under Sub-section3 of Section 7 (tax payable under reverse charge)
  • Amount payable by the department against any interest, refund, penalty, late fee or any other amount determined under the proceedings under this Act

Rule 2- Electronic Credit Register

An Electronic Credit Ledger will be maintained on the common portal in FORM GST PMT-2 for the tax payer for the amount being claimed as input tax credit, will be credited to this ledger.

The Electronic Credit Register will be credited with the total amount of tax payable on account of liability, interest, late fee etc as determined under Section 35 of the Model GST Law.

The Electronic Credit Register will be debited with any amount of refund under provisional basis under Sub-Section 4A of section 38 of Model GST Law received or transfer of input tax credit under Section 37 of the Model GST Law.

In case if the refund is rejected, the amount debited under provisional basis under Sub-Section 4A of section 38 of Model GST Law will be debited through FORM GST PMT-2A.

Rule 3 – Electronic Cash Ledger

An Electronic Cash Ledger will be maintained on the common portal for every tax payer based on the provisions of Sub-Section 1of section 35 of Model GST Law in FORM GST PMT-3 towards the amount deposited by the tax payer towards discharge of his tax liability or interest or late fee or penalty any other amounts.

The payment will be done by the tax payer using the FORM GST PMT-4 on the common portal for the amount being paid for tax liability or interest or late fee or penalty any other amounts. The FORM GST PMT-4 generated on the common portal will be valid for a period of fifteen days.

The payment of tax liability or interest or late fee or penalty any other amounts under GST can be done using any of the following methods

  • Internet banking – authorized by the board
  • Through credit card or debit card
  • National Electronic Fund Transfer (NEFT) or Regal Time Gross Settlement (RTGS)
  • Over the counter (OTC) for amounts less than Rs 10,000 in cash or through cheque or demand draft

Usage of debit / credit card for payment of tax is a new feature added which is not existing under any of the acts currently in India.

If any payment is required to be made by non-taxable person, a temporary identification number will be generated by the concerned tax offer and payment has to be done in FORM GST PMT-5.

Where the payment is made by way of NeFT or RTGS mode from any bank, the mandate form shall be generated along with the challan and the same shall be submitted to the bank from where the payment is to be made.

A Challan Identification Number (CIN) will be generated when the amount is credited to the concerned tax account by the bank and the same will be mentioned in the Challan.

In case if the amount is not credited to the electronic cash ledger of the tax payer but the amount got debited from the taxpayer’s account FORM GST PMT-6 has to be filed with the bank or the payment gateway for the amount to be updated in his electronic cash ledger.

 Electronic Cash Ledger will be credited under the following cases also

  • Amount deducted under Section 37 (Tax Deduction at Source)
  • Amount collected under Section 43 C (Tax Collection at Source)
  • Amount payable under Sub-section3 of Section 7 (tax payable under reverse charge
  • Amount payable by the department against any interest, refund, penalty, late fee or any other amount determined under the proceedings under this Act

 Electronic Cash Ledger will be debited when a refund is rejected.

Rule 4 – Identification number for each transaction

A unique identification number will be generated by the common portal for every debit or credit to the Electronic Cash Ledger or Electronic Credit Register.

Any views or opinions represented above are personal and belong solely to the author and do not represent those of people, institutions or organizations that the owner may or may not be associated with in professional or personal capacity, unless explicitly stated. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.

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