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MODULE - 1 PAYMENT OF TAX AND REFUNDS Chapter I(A) Payment of Tax 1A.1 STATUTORY PROVISIONS [SECTION 49, 50, 51, 52] 10.2 ELECTRONIC CASH LEDGER - SECTION 49(1) AND (3) READ WITH RULE 87 OF GST RULES 1A.3 ELECTRONIC CREDIT LEDGER SECTION 49(2), (4) AND (5) READ WITH RULE 86 OF CGST RULES 14.4 MANNER OF UTILIZATION OF INPUT TAX CREDIT (ITC) 1A.5 SECTION 50: INTEREST ON DELAYED PAYMENT OF TAX - STATUTORY PROVISIONS 1A.6 SECTION 51: TAX DEDUCTION AT SOURCE (TDS) - STATUTORY PROVISIONS 1A.7 SECTION 52: COLLECTION OF TAX AT SOURCE (TCS) - STATUTORY PROVISIONS > OBJECTIVES > EXERCISE ————————————————————— Scanned with CamScanner) wer Viput’s™ Taxation - V (Indirect Tax - ny 2 1A.1 STATUTORY PROVISIONS [SECTION 49, 50, 51, 52): Section 49: Payment of tax, interest, penalty and other amounts: (1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National as nic Fund Transfer or Real Time Gross Settlement or by such other mode and = Hah to such conditions and restrictions as may be prescribed, shall be credited to a electronic cash ledger of such person to be maintained in such manner as may prescribed, 2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41 or section 43A, to be maintained in such manner as may be prescribed. (3) The amount available in the electronic cash ledger may be used for making: any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed. (4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed. ) (5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of: (a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order; (b) the central tax shall first be utilised towards payment of central tax and the = remaining, if any, may be utilised towards the payment of integrated (0) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax; Provided that the input tax credit on account of State tax shall tii towards payment of integrated tax only where the balance of pinnae o os ‘on account of central tax is not available for Payment of integrated tax; e Union territory tax shall first be utilised toy i territory tax and the amount remaining, if any, — eee See payment of integrated tax; a Provided that the input tax credit on account of Uni a i inion territory tax shall be utilised t. ny towards payment of integrated tax only where the balance of the input tax credit on account i i tax m account of central tax is not available for Payment of integrated Scanned with CamScanner“il aa rrressrsrscnsiticetigemnsiiTd s‘~S Payment of Tax ror (e) the central : tax shall ili territory tax; and not be utilised towards payment of State tax (f) the State tax or Unic i contal ae Inion territory tax shall not be utilised towards pa) (6) The balance it i a ae the ee cash ledger or electronic credit ledger oe palates ty, ¢ or any other amount payable under this ae ay be refunded in accordance with the provisions o} fore a ae a : taxable person under this Act shall be recorded a ic liability register in such manner as may be prescri ae a person shall discharge his tax and other dues un le thereunder in the following order, namely: (a) self-assessed tax, and other dues related to retums of previous 'a% periods; (b) self-assessed tax, and other dues related to the return of the t or the rules ma‘ ection 74; ‘Act or the 7) @ : der this A‘ (9 any other amount payable under this Ac or Union yment of after payment of f section 54. and maintained in ct or the current tax period; de thereunder including the demand determined under section 73 or s* or both under this Act (9) Every person who has paid the tax on goods or services shall, unless the contrary is proved by him, be deemed to have pas incidence of such tax to the recipient of ‘such goods or services or both. Explanation: For the purposes of this section: ff the Government in the (a) the date of credit to the account o! deemed to be the date of deposit in the electronic cash ledger; (b) the expression: (i) “tax dues” means the tax payabl sed on the full authorised bank shall be le under this Act and does not include interest, fee and penalty; and penalty, fee or any other amount payable under (ii) “other dues” means interest, les made there under. this Act or the ru Analysis: Section 49 of the CGST Act, interest, penalty or fees through: towards payment of tax, (a) Internet banking through authorized banks; thorized banks after registering on cor oa (b) Debit/Credit card through aut every person will make deposit in Form GST PMT-04 (¢). NEFT or RTGS : ment up to Rs. 10,000 through authorized banks restricted to (a) Over the Counter pay per challlan, per '@ period by cash, cheque, or demand draft. Scanned with CamScanner‘ r Vipul’s™ Taxation - V (Indirect Tax - Il) Electronic Cash Ledger shall be debited by amount pertaining to: e (@) Amount payable towards tax, interest, penalty, fees or any other amount payable as per return; {b) Amount payable towards tax, interest, penalty, fees or any _ amount pa’ determined by proper officer in pursuance of any proceedings; (© Amount of tax and interest payable as a result of any mismatch; (a) Any amount of interest that may accrue from time to time; (e&) Amount of tax deducted under Section 51 ie. TDS; (f) Amount of tax collected under Section 52 i.e. TCS; (g) Amount payable under Section 9(3) i.e. RCM; (h) Amount payable under Section 10 i.e. Composition Scheme; > Amount payable through cash ledger shall be after adjusting amount if any available under electronic credit ledger in Form GST PMT-02 adjusted against payment of “Tax” only. > Balance if any under electronic credit ledger shall be eligible for refund, subject to provision of Section 54 of CGST Act, after adjusting tax, interest, penalty, fees or any other payment. > Amount paid will be reflected as per Rule 87 in “Electronic Cash Ledger” maintained at GST Portal. yable as 1A.2 ELECTRONIC CASH LEDGER - SECTION 49(1) AND (3) READ WITH RULE 87 OF CGST RULES: Electronic Cash Ledger is maintained on the GST Portal deposits/payments made. The payment is to be made online on GST Portal. There is a single chall. i for al, taxes, fees, penalty, interest and other Payments, i.e. E-Challes ies E-Challan validity is 15 days. The commission for maki E-Challan has to be bome by person making payments, © P*Y™en’s through Any unregistered has to mak i Identification Number generated trough Common seced7 Basis oF Temporary ni mmon portal. deposit made will be credi i ns credit through the Electronic Cash Ledger of the concerned 1. It contains summary of all Copy of E-Challan is enclosed. (Annexure A), Scanned with CamScanner(oreo te be pnt os han HOF nS ei Ne Sn a er a Haan 0 sowing Lat Bae cocoons te nt tree rate case amg tat oO taemereted Cmte we = o te ee over henge 30,000 18,000 +2000 me cows 40,000 7.900 3,000 eee - ze 10,000 10,000 om oe = 50,000 18,000 7,000 10,000 ** 15.000, = soe tere ne i eee soreness SR Ulllisation of amount reflected in Electronic Cash ledger Section 9(3) ‘The amount reflected in the electronic cash ledger may be used for making payments towards output tax, interest, penalty, fees or any other amount, ‘The ledger information is kept minor head-wise for each major head. Major Heads are (a) IGST, (b) CGST, (e) SGST/UTSGST, (d) Cess Minor Heads under each major head are (a) Tax, (b) Interest, (c) Penalty, (d) Fees (e) Other amount. : Major Head Minor Heads Tax | Interest Penalty Fees Other Amount IGST cGST SGST/ UTSGST Cess “The amount available in the Electronic Cash Ledger can be uti any lability for respective major or minor heads, For example, piney | Payment of can be settled only from the amount available under major hi be seftminor head for SGST major head can be utiieed ae ae credited (Gee Annexure B) ly for interest for SGST, Scanned with CamScannerPayment of Tax vee Mlustration 1: M/s. Poomis ; 7 i 5 Poomima Ltd. shows Rs. 1,000 is available as interes Aten a liability of late fees as Rs. 500 under major - Poornima Ltd. adjust Rs. 500 of interest to pay fees? Solution: Poomima Ltd. cannot utilize Rs, 500 available under head interest in major head SGST to pay fees under major head SGST. > Transfer of fund from one major head to another major head: _ Amount available under one major head cannot be utilized for discharging the liability under other major head. Illustration 2: M/s. Poornima Ltd. made payment of Rs. 5,000 under major head SGST, minor h Tax. There is liability of Rs. 2,000 under major head IGST, minor head Tax. Advice, can Company adjust this? t under major head SGST- head SGST. Advice can ead Solution: M/s. Poornima Ltd. cannot adjust Rs. 5,000 Tax available under SGST major head to Tax Rs. 2,000 under major head IGST. 1A.3 ELECTRONIC CREDIT LEDGER SECTION 49(2), (4) AND () READ WITH RULE 86 OF CGST RULES: ITC means Input Tax Credit. Section 49(2) states the input tax credit as self-assessed in return of a registered person shall be credited to his electronic Credit Ledger. The input tax credit as self-assessed in monthly return will be reflected in the Electronic Credit Ledger. The credit in the Electronic Credit Ledger can be utilized only for payment of tax. It cannot be utilized in making payment of interest, fees, penalty, etc. (See Annexure Q Scanned with CamScanner; cer Viput’s™ Taxation - V (Indirect Tax - ny “From 01/11/2017 a ‘eng Seton Cre edger det frm 04/21/2017 tp 20/11/2017, Sr Date Reference No. Tax Descrigtion Transaction ere 7 Dit C2) te. Period Type av (olbny —Totegrated —ContralTax State Tax CESS Geary Text) : oening ance 1c caves 2 20/iw2017 sassiorrsis7ase occ17 thgh= creat 18,000 7,000 10,000 0.00 Inpat ‘tner stan 3 monuao17 owaurrorsece 217 terene vee 18,000 7,000 10,000 0.00 owe re : ing anes = 1A.4 MANNER OF UTILIZATION OF INPUT TAX CREDIT (ITC): () Credit of IGST: Payment of: (a) IGST (2) CGST (3) SGST/UTGST (i) Available CGST Credit Payment of: () CGST (2 IGST (III) Available Credit of SGST Payment of () SGST (2) IGST Scanned with CamScanneree ere Payment of Tax vc g Avail ue (IV) Available Credit of UTGsT Payment of (@) UTGsT (2) IGST Note: ie ‘GST: sinilaly, S6ST/ OTe coder payment ial . canne ili: t . ae 1ot be utilized for payment o! Vidya Ltd. has given following information for the month of October, 2018. Particulars 1GST CGST ‘SGST Total Output Liability 7150000] 80,000] 80,000 3,10,000 Ic: Opening Balance 40,000] 10,000 10,000 60,000 Credit for the month 60,000] 20,000] —_ 20,000 1,00,000 Give your computation. Solution: Output Liability IGST CGST SGST Total (A) 1,50,000 80,000 0,000 | _3,10,000 ITC Opening Balance 40,000 10,000 10,000 60,000 ITC for the month 60,000 20,000 20,000 | _ 1,00,000 (B) 1,00,000 30,000 30,000 | __1,60,000 GST Liability (A - B) xe 50,000 50,000 1,50,000 GST Liability to be paid through Blectronic ‘Cash Ledger. Illustration 4: Ujwala Ltd. gives following information for the month of December, 2018. Compute Cc ies liability. compare Particulars 1cst | ccstT | scsT Total Output Liability 40,000 | 70,000 | 70,000 180,000 see Bee 20,000 | 5,000 5,000 30,000 One vonth con00 | 80,000 | 80,000 Credit for the mon! a 2,20,000 Scanned with CamScannercc 10 rer Vipal’s™ Taxation - V (Indirect Tax - ily Solution: [ Output Liability : IGST CGST SGST Total (a) 40,000 70,000 70,000 1,80,000 ITC ‘Opening Balance 20,000 5,000 | 5,000 30,000 ITC for the month 60,000 80,000 80,000 2,20,000 ®) 80,000 85,000 85,000 2,50,000 GST Liability (A - B) (40,000) (15,000) (15,000) (70,000) Illustration 5: 2018. Compute Liability. Refund of Rs. 70,000 to be carried forward to the next month. Ms, Paranjpe and Company gives following information for the month of December, Particulars IGST CGST SGST Total Output Liability 50,000 1,00,000 1,00,000 2,50,000 i] ITc: Opening Balance 10,000 50,000 90,000 2,50,000 Credit for the month 42,000 | 20,000 | _20,000 82,000 Solution: Output Liability IGST CGST SGST Total @) 50,000 | 1,00,000 | 1,00,000 | 2,50,000 ITc Opening Balance 10,000 50,000 90,000 | 1,50,000 ITC for the month | 42,000 | 20,000 | 20,000 | _ 82,000 ® 52,000 | 70,000 | 1,10,000 | 232,000 (A-B) (2,000) 30,000 (10,000) | — 28,000 IGST can be adjusted against CGST 2,000 2,000 = GST Liability Nit_[ 28,000 | 0,000] 200 Credit of SGST cannot be utilized for Payment of CGST Rs. 28,000. Scanned with CamScannerCS Payment of Tax r I 1A.5 SECTION 50: INTE AX = . REST ON DI YMENT OF T. STATUTORY PROVISIONS: ELAYED PA’ (Every persor is li ich i : od mn who is liable to pay tax in accordance with the provisions of this Act les made thereunder, but fai thereof to the Government within the weve Put fails to pay the tax or any part t any part thereot vee Petiod prescribed, shall for the period for which the tax or Sic cding nce tse ey a, ns cn such rate, 9 3 Per cent., as be if Government on Remmmeniiee ee notified by the Gove @ ee sub-section (1) shall be calculated, in such manner as may be P' , from the day succeeding the day on which such tax was due to be paid. (3) A taxable person who makes an undue or excess claim of input tax credit under subsection (10) of section 42 or undue or excess reduction in output tax liability under subsection (10) of section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not exceeding twenty-four per cent, as may be notified by the Government on the recommendations of the Council. Analysis: Section 50 of the CGST Act provides for Interest on delayed payment of Tax. This clause fixes the ceiling of interest rate and other specified fixed rate. Interest is payable in following circumstances: (Delay in Payment of Tax (ii) Under Section 42(10) , undue or excess claim of Input Tax Credit (iii) Under Section 43(10), undue or excess reduction in output tax liability Rate of Interest: ‘As per Section 50 of CGST Act, every person is liable to pay interest. The government fication No. 13/2017 with effect from 01/07/2017 as given below: has notified by Noti St No. Particulars Rate of Interest @ Fails to pay the tax or part thereof to the Government within 18% prescribed time (2 __ | Claim undue or Excess ITC mis @) | Claim undue or excess reduction in liability ome Computation of Interest: ‘The period of Interest will be from the date following the due date of payments to the actual date of payments of Tax. Illustration 6: M/s. Gupta and Company not on or before due date that is 20/06, Payable. paid the tax Rs. 20,00,000 for the month of May 2018, 5/2018. It-paid tax on 10/10/2018. Compute Interest Scanned with CamScanner12 wy? ‘Vipul’s™ Taxation - V (Indirect Tox - Ill) Solution: [Delay In Days ‘Amount Rate 112 20,00,000 18% 2. 18 20 = 365 * jog « OMe Rs. 110,466 Mlustration 7: M/s. Golmaal Ltd. gives following information. Golmaal Ltd. claimed excess credit of Rs. 5,20,000 in the month of May return which is due on 20/06/2018. This was detected in the month of 20th November, 2018 and adjusted. Compute Interest. Solution: Amount | Days Rate of Tax 5,20,000 | 153 24% 5,20,000 |. 153. 24 32 T * 365 * G99 = Rs 52,313 Other Points: (Q) The liability for interest by payment in cash through Electronic Cash Ledger and is not to be adjusted through Electronic Credit Ledger. (2) The interest payable under this section will be debited to Electronic Liability Register. (3) The payment of Interest in case of belated payment of tax can be made voluntarily. 1A.6 SECTION 51: TAX DEDUCTION AT SOURCE (TDS) - STATUTORY PROVISIONS: (2). Notwithstanding anything to the contrary contained in this Act, the Government may mandate: . (a) a department or establishment of the Central Government or State Government; or (b) local authority; or () Governmental agencies; or (a) such persons or category of persons as may be notified by the Government on the recommendations of the Council, ' (hereafter in this section referred to as “the deductor”), to deduct tax at the rate of one per cent. From the payment made or credited to the suppliet (hereafter in this section referred to as “the deductee”) of taxable goods °F services or both, where the total value of such supply, under a contract, exc two lakh and fifty thousand rupees: Scanned with CamScannerPayment of Tax : zur 13 Provided that no deduction shall be made if the location of the supplier and the place of supply is in a State or Union territory which is different from the State or as the case may be, Union territory of registration of the recipient. Explanation: For the purpose of deductiqn of tax specified above, the value of supply shall be taken as the amount excluding the Central tax, State tax, Union territory tax, Integrated tax and Cess indicated in the invoice. (2) The amount deducted as tax under this section shall be paid to the Government by the deductor within ten days after the end of the month in which such deduction is made, in such manner as may be prescribed. (3) The deductor shall furnish to the deductee a certificate mentioning therein the contract value, rate of deduction, amount deducted, amount paid to the Government and such other particulars in such manner as may be prescribed. (4) If any deductor fails to furnish to the deductee the certificate, after deducting the tax at source, within five days of crediting the amount so deducted to the Government, the deductor shall pay, by way of a late fee, a sum of one hundred rupees per day from the day after the expiry of such five day period until the failure is rectified, subject to a maximum amount of five thousand rupees. (5) The deductee shall claim credit, in his electronic cash ledger, of the tax deducted and reflected in the return of the deductor furnished under sub-section (3) of section 39, in such manner as may be prescribed. (6) If any deductor fails to pay to the Government the amount deducted as tax. under sub-section (1), he shall pay interest in accordance with the provisions of sub- section (1) of section 50, in addition to the amount of tax deducted. (7) The determination of the amount in default under this section shall be made in the manner specified in section 73 or section74. (8) The refund to the deductor or the deductee arising on account of excess or erroneous deduction shall be dealt with in accordance with the provisions of section 54: Provided that no refund to the deductor shall-be granted, if the amount deducted has been credited to the electronic cash ledger of the deductee. Analysis: Following persons are liable (Deductor) for taxable supplies receive to deduct of payment made or credited to suppliers (Deductee) exceeding Rs. 2.50000. (1) A department or establishment of the Central Government or State government (2) Local Authority (3) Government Agencies (4) Person or category of persons notified given below: (a) Anauthority or a board or any other body: Scanned with CamScanner. Ww 7 uw Viput’s™ Taxation - V (Indirect Tax - I) A : . Set up by an Act of Parliament or a State Legislature; or ii) Established by any Government, with fifty-one percent or more participation by way of equity or control, to carry out any function; (b) Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860); (© Public Sector Undertakings Provided that the said persons shall be liable to deduct tax from the payment made or credited to the supplier of taxable goods or services or both with effect from a date to be notified subsequently, on the recommendations of the Council, by the Central Government. (i) Due date for payment is 10th of next month, in which tax has been deducted. Gi) Person responsible for deduction of tax at source are required to make payment through form GSTR - 7 on value of supply excluding GST. Gii) Deductor to issue TDS certificate for amount deducted, within 5 days, from the date of payment of TDS to the Government, mentioning therein the contract value, rate of deduction, amount deducted & paid, etc. on certificates and on failure to issue TDS certificate will be liable of penalty of Rs. 100 per day maximum of Rs. 5,000. (iv) Deductee shall claim credit of ‘TDS deducted in his electronic cash ledger. (v) No deduction is required to be made if location of supplier and the place of supply are in different state or Union Territory. (vi) Any excess or erroneous payment will be eligible for refund subject to provision of section 54 of CGST Act. In short, (i) Due date of payment = 10 of next month in which tax has been deducted (ii) Issue of Certificate = within 5 Days from date (iii) Claim of Credit = deductee can claim TDS credit in his electronic cash ledger (iv) Value on which Tax Deducted = TDS is deducted on value of supply excluding tax (W) No Deduction = If location of supplier and the place of supply are in different state or union territory (vi) Erroneous Payment = Any excess or erroneous payment will be eligible for refund As per 22nd council meeting on 6th October, 2017 has put on hold the provision of TDS. Scanned with CamScanneree ae Payment of Tax vor - Illustration 8: eames a Bot contract of Metro Rail No. 7. Amount paid on 10-10-2018 Bill Amount 50,00,000 CGST@9% 4,50,000 SGST @9% _450,000 52,00,000 Find amount of TDS. Solution: Amount of TDS is 1% of amount paid or credited i.e. 1% of 50,00,000 is Rs. 50,000 Note: amount liable for TDS is net of GST. Scanned with CamScanner