How to Pay GST Online: Rules, Process, & Time Limit

|Updated on: June 14, 2024

Introduction

GST payment is the periodical remittance of GST amount payable by the business. It one of the major requisites for a business to stay compliant. As per the guidelines, every registered regular taxpayer must make GST payment with a due date – 20th of every month along with the submission of GSTR-3B return.

The GST payment can be made online - promising a seamless and transparent experience.

Understanding GST payments

In making the GST payment, the GST act allows the businesses to set the eligible input tax credit (ITC) with the output GST collected on the sales. Thus, before making GST payment, businesses need to first apply the GST payment calculations. The GST payment calculations steps are given below

  • Determine the total output GST
  • Determine the eligible ITC
  • Set-off the output GST with the ITC. Here you need to follow the set-up order of CGST, GST and IGST.
  • The balance is the GST liability that a business needs to pay.

GST payment due dates

As per the GST payment rules, if a person furnishes a GST Monthly Return without paying the tax due, the return furnished will be considered as an invalid return. Without furnishing the return for a month and paying the tax due, the subsequent month’s return cannot be furnished. Also, if the tax due is not paid, interest will be applicable on the same, starting from the GST payment due date on which the tax was supposed to be paid.

Hence, it is necessary to understand the GST payment method in order to avoid the penalties of non-payment of tax.

GST payment modes

The two modes of GST payments are as follows.

Online mode

You can make your GST payments online by using net banking, debit card, and credit card. It is not mandatory for you to log into the GST portal to pay using the online methods. You can make an online payment using most of the popular banks in India. Once you complete the GST payment, the electronic cash ledge is instantly updated to reflect the successful payment. In the case you have not logged in but have generated challan, it is recommended that you pay as soon as you can.

Offline mode

You can pay using NEFT (national electronic fund transfer), RTGS (real-time gross settlement), or OTC (over the counter) payment methods. The OTC method includes payment using demand draft, cheque, and cash. The OTC method can take a few days and the electronic cash ledger is updated once the banks process the payment. It must be noted that the maximum amount payable using OTC is Rs. 10,000.

You must generate GST challan prior to paying using the offline modes. It doesn’t matter whether you generated the challan after logging into the portal or without logging in. You must print the challan, fill in the required details, sign, and then submit to your bank so the payment can be processed. If you use the RTGS/NEFT method then you will have an additional step which is to get the UTR (Unique Transaction Reference) number from the bank and then log into the portal to ensure the electronic cash ledger is up-to-date.

Step to pay GST online

Here's a step by step process for how to make your GST payment online.

  • Set-off the tax liability by using the credit available in Electronic credit ledger

  • Deposit money in the Electronic cash ledger to pay the balance tax liability

  • Generate challan for making the GST payment - Challan for the payment can be generated from the GST payment portal using Form GST PMT-06. The details of the amount to be deposited towards tax, interest, penalty, fees or any other amount should be entered in the challan. The challan generated will be valid for 15 days

  • Make the GST payment using the given modes -
    • Internet banking through authorised banks
    • Credit card or debit card through authorised banks
    • National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) from any bank
    • Over the counter (OTC) payment through authorized banks for deposits up to Rs.10,000 per challan per tax period, by cash, cheque or Demand Draft (DD)

Note: If the payment is to be made by NEFT or RTGS, a mandate form will be generated along with the challan on the GST portal. The mandate form has to be submitted to the bank from where the payment is made. The mandate form will be valid for 15 days.

  • Generation of CIN and credit to Electronic cash ledger - Once the amount paid by a dealer is credited to the concerned government account, a Challan Identification Number (CIN) will be generated and the same will be mentioned in the challan in the GST portal. On receipt of the CIN, the amount paid will be credited to the person’s Electronic cash ledger.

Generating GST challan

The following GST payment forms are of importance for any dealer liable to pay GST online in India -

Form GST PMT-01

Electronic tax liability register will be maintained in Form GST PMT-01

Form GST PMT-02

Electronic credit ledger will be maintained in Form GST PMT-02

Form GST PMT-03

Order of rejection of claim for refund of balance in Electronic credit ledger/Electronic cash ledger, issued by an authorised officer

Form GST PMT-04

If a person notices any discrepancy in his Electronic credit ledger, he can communicate the same using Form GST PMT-04

Form GST PMT-05

Electronic cash ledger will be maintained in Form GST PMT-05

Form GST PMT-06

Challan for payment of tax, interest, penalty, fees or any other amount

Form GST PMT-07

If a person’s bank account has been debited but CIN has not been generated or CIN has been generated but not communicated to the GST portal, the person can inform the same using Form GST PMT-07

Utilizing GST cash & credit ledger

GST payment ledgers

For the purpose of GST tax payment, every registered dealer will need to maintain 3 ledgers in the GST payment portal, which is the starting step of the GST payment process. The 3 ledgers are:

  • Electronic tax liability register - All liabilities of a person towards tax, interest, penalty, late fee or any other amount will be debited here.

  • Electronic cash ledger - Every deposit made by a person towards tax, interest, penalty, late fee or any other amount will be credited here.

  • Electronic credit ledger - Input tax credit, as self-assessed and claimed in Form GSTR-2 by a person, will be credited here. This can only be used by a person - only for paying tax, and not for settling other amounts such as interest, late fee, and so on.

GST payment ledgers set-off

To pay the liabilities shown in the Electronic tax liability register, a person can use the balance in the Electronic cash ledger and Electronic credit ledger.

When liability is paid:

  • The Electronic tax liability register will be credited by the amount paid.
  • The Electronic credit ledger will be debited by credit used for making the payment.
  • The Electronic cash ledger will be debited by the amount of deposit used for making the payment.

Filing GST returns post-payment

Importance of filing returns after payment:

  1. Legal compliance: Filing GST returns after making the tax payment is mandatory under the GST law. It ensures that your business remains compliant and avoids any legal complications or penalties.

  2. Claiming Input Tax Credit (ITC): Timely filing of GST returns is crucial for claiming ITC. ITC allows businesses to reduce their tax liability by claiming credit for the GST paid on purchases. Delayed or missed filings can result in the denial of ITC claims.

  3. Maintaining business credibility: Regular and timely filing of GST returns helps maintain your business's credibility. It shows that your business is responsible and reliable, which can be beneficial in dealings with suppliers, clients, and financial institutions.

  4. Avoiding penalties and late fees: Failure to file returns on time results in penalties and late fees. These additional costs can be avoided by ensuring returns are filed promptly after tax payments are made.

Linking payment with GSTR-3B:

  1. Accurate reporting: Ensure that the tax payment details match the amounts reported in your GSTR-3B return. Any discrepancies can lead to issues during verification by the GST authorities.

  2. Challan details: When filing GSTR-3B, include the details of the challans used for making tax payments. This ensures that the payment is correctly linked to your return.

  3. Payment confirmation: Before filing GSTR-3B, verify that the payment has been successfully processed and credited to the government's account. This can be checked on the GST portal under the "Challan History" section.

  4. Utilizing ITC: While filling out GSTR-3B, ensure you correctly claim any eligible ITC against your tax liability. This reduces the cash outflow required for tax payment.

Common errors and how to avoid them:

  1. Incorrect tax amounts: Double-check the tax amounts reported in the return. Ensure that the amounts match your records and the payments made. Mistakes in reporting can lead to discrepancies and potential penalties.

  2. Mismatched details: Ensure that the details of sales, purchases, and ITC claimed match the records maintained by your business. Any mismatch can result in issues during audits or verification.

  3. Incorrect HSN codes: Use the correct HSN codes for the goods or services supplied. Incorrect HSN codes can lead to rejections or issues with ITC claims.

  4. Late Filing: Always file your returns on time. Set reminders and alarms to ensure that deadlines are met. Late filing attracts penalties and can affect your compliance rating.

  5. Omissions: Avoid leaving any fields blank or missing out on reporting certain transactions. Ensure that all taxable supplies, exempt supplies, and purchases are accurately reported.

  6. Error in challan details: Ensure the challan details, including the CIN (Challan Identification Number), are accurately entered in the return. Incorrect challan details can lead to payment mismatches and delays in processing.

GST payment online FAQs

What is a GST payment?

GST payment refers to the tax paid by businesses on the supply of goods and services. It is a mandatory payment to the government based on the GST law.

What are CGST, SGST, & IGST?

  • CGST: Central Goods and Services Tax on intra-state supplies.
  • SGST: State Goods and Services Tax on intra-state supplies.
  • IGST: Integrated Goods and Services Tax on inter-state supplies and imports.

What is the official website for GST payment?

The official website for GST payment is www.gst.gov.in.

Can we pay GST through UPI and/or credit/debit cards?

Yes, GST can be paid using UPI, credit cards, and debit cards on the GST portal.

How to download GST challan?

  1. Log in to the GST portal.
  2. Go to "Services" > "Payments" > "Challan History."
  3. Enter details and download the challan PDF.
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