GST Payments And GST Refunds

GST payment is the periodical remittance of the GST liability of the company. Timely GST payment is one of the most critical conditions for a company to remain compliant. As per the guidelines, any registered taxpayer shall make a GST payment on a due date – the 20th of each month, along with the submission of a GSTR-3B return. The GST payment can be made online for a smooth and straightforward experience.

There are different ways to make a GST payment;

• GST Portal
• At any of the registered banks at the Counter or via NEFT/ RTGS
• Or through any integrated softwares

Calculation of GST payment

In order to make a GST payment, the GST Act requires companies to set an applicable Input Tax Credit (ITC) for the production GST received on purchases. Thus, before making GST payments, companies must first submit the estimate of GST payments. The steps for the GST payment calculations are given below:

• Determine the overall output GST
• Determine the ITC qualifying
• Set-off the GST output with the ITC. Here you need to obey the CGST, GST and IGST set-up orders.
• The surplus is the GST liability that a company has to pay for

GST Payment Process

GST Payment Ledgers

For the purposes of GST tax payment, every licenced taxpayer would need to keep 3 ledgers in the GST payment portal, which is the initial phase in the GST payment process. The three ledgers are:

Electronic Tax Liability Register - All liabilities of an individual in respect of tax, interest, charge, late payment or some other amount are debited here.

Electronic Cash Ledger - Any deposit made by an individual in respect of tax, interest, penalty, late payment or any other amount will be credited here.

Electronic Credit Ledger - Input Tax Credit, as self-assessed and claimed by an individual in Form GSTR-2, will be attributed here. This will only be used by a person-only to pay tax, and not to settle any sums, such as debt, late payments, and so on.

GST Payment Steps

Here is a step by step guide on how to make the GST Payment on the GST Portal

• Effect the tax obligation by using the credit available in Electronic Credit Ledger
• Deposit money in Electronic Cash Ledger to pay the remainder of the tax debt
• Generate GST Payment Challan - It can be created from the GST Payment Portal using Form GST PMT-06. The specifics of the amount to be paid in respect of tax, interest, penalty, fees or any other amount should be entered in the challan. The created challan has a validity of15 days.
• You can now complete the payment using one of the following methods: 
• Internet banking from any of the authorised banks
• Credit card or debit card of any of the authorised banks
• NEFT or RTGS from any bank
• Over the counter payment through authorized banks for deposits up to Rs. 10,000 per challan per tax period, by cash, cheque or Demand Draft (DD)

• Generation of CIN and Credit to Electronic Cash Ledger-As soon as the payment made by the dealer is credited to the government account concerned, a Challan Identification Number (CIN) will be created and the same will be specified in the Challenge in the GST portal. Upon receipt of the CIN, the balance paid will be credited to the Electronic Cash Ledger.

GST Payment Forms

GST Refunds

There are numerous instances giving rise to Refund Claims under GST; 

• Excess amount of tax paid due to error or misinterpretation
• Export of goods/services within the framework of the refund demand or refund of the received input duty/tax credit when goods/services are exported
• Finalization of the preliminary assessment
• Refund of the pre-deposit for the submission of an appeal assimilating the refund due according to the order of the appeal authority
• Charge of duty/tax during the inquiry, but no/less responsibility occurs in the case of conclusion of the investigation/adjudication.
• Refund of the tax charged on sales rendered by the Embassies or UN bodies
• Credit processing on the grounds of output tax allowance or zero-rated
• Credit collection due to the reversed obligation arrangement, i.e. the tax rate difference between production and imports.
• Year-end or volume-based rewards offered by the retailer through credit notes
• Refund of taxes for foreigners

How to claim a GST refund? Step-by-step Process

Here is a step by step guide on how to apply for GST Refund: 

Step 1: Login to the GST portal.

Step 2: Go to 'Services' > 'Refunds' > 'Application for Refunds'

Step 3: Pick 'Refund Excess Balance in Electronic Cash Ledger' and press 'Create.'

Step 4: Once you click on 'Create', the balance available in Electronic Cash Ledger will be auto-populated in the form.

Step 5: You should insert the refund values to be claimed in the 'Refund Claimed' table. The refund balance might be less than or equal to the sum available in Electronic Cash Ledger.

Step 6: After viewing the outstanding demand, click on "Go Back to Refund Form."

Step 7: Pick the bank account (in which you expect the refund to be credited) from the drop-down box.

Step 8: To upload the supporting documents, please follow the following steps:

• Please include the overview of the document
• To add a document, press "Choose File"
• Click the "Delete" button to delete the uploaded file

After the document has been uploaded, click on "SAVE"

Step 9: Click on "PREVIEW" to download the form in PDF format. After reading the filled up form, click on the "PROCEED" button to submit the form.

Step 10: In the declaration, click the checkbox. From the drop-down, pick the name of the 'Authorized Signatory.' Dependent on the type of your company, click on "SUBMIT WITH DSC" or "SUBMIT WITH EVC." In the case of DSC, pick the certificate of the approved signatory and press the 'SIGN' button. In the case of EVC, enter the received OTP on the authorised signatory's mail ID or mobile number and click on 'VERIFY.'

Stage 11: Once RFD-01 is filed, ARN will be issued and 'Refund ARN Receipt' can be downloaded as a PDF document from 'Services' > 'Refunds' > 'My Saved/Filed Applications.'

Filed applications can be tracked using the "Track Application Status" portion under Refunds.

The refund balance will be transferred to the claimant bank account following inspection by the GST authorities.

Points to remember while filing a GST Refund Claim

• The application form to demand a refund can be filed via the GSTN portal
• An acknowledgment number will be issued to the claimant via SMS or email when the application is filed electronically.
• Changes will be made to the return and cash leger and the "carry-forward input tax credit" shall be credited accordingly
• The request for refund and the related documents submitted must be reviewed and enforced accordingly within 30 days of the receipt of the request for refund.
• The matter of "unjust enrichment" would be analysed in order to secure a refund request. In the event of non-qualification, the refund will be passed to CWF (consumer welfare fund)
• If the value of the refund shown crosses the predetermined amount of the refund, then the file will collect the refund by the pre-audit method.
• The refund will be credited electronically to the applicant's account via ECS, RTGS or NEFT.

Timeframe for Refund Process Completion

The Subramanian Committee, along with the established GST laws and regulations, suggested that the application for refunds should be sent within 90 days and be processed within the same time span. If, in any event, the claim could not be completed within the timeline, it is requested that 6% of an interest be given along with the refund sum.

It has also been announced by the Finance Minister, who has cleared that the refund process will take place within 7 days and that if the process is postponed for more than 2 weeks, the refund will be issued along with the interest.

The method of applying for refund is speculated to be fast and seamless due to its digital reliability. The data will also be submitted online, which shows that the authentication and thorough review of the refund application will be simple.

FAQs