Unit – III

GST Payments and Refunds

A. Payments
What are payments to be made under GST?
Under GST the tax to be paid is mainly divided into 3 –
 IGST – To be paid when interstate supply is made (paid to center)
 CGST – To be paid when making supply within the state (paid to center)
 SGST – To be paid when making supply within the state (paid to state)

Apart from the above payments a dealer is required to make these payments –
 Tax Deducted at Source (TDS) – TDS is a mechanism by which tax is deducted by the
dealer before making the payment to the supplier
For example – A government agency gives a road laying contract to a builder. The contract
value is Rs 10 lakh. When the government agency makes payment to the builder TDS @ 1%
(which amounts to Rs 10,000) will be deducted and balance amount will be paid.

 Tax Collected at Source (TCS) – TCS is mainly for e-commerce aggregators. It means
that any dealer selling through e-commerce will receive payment after deduction of TCS
@ 2%.
This provision is currently relaxed and will not be applicable to notified by the government.
 Reverse Charge – The liability of payment of tax shifts from the supplier of goods and
services to the receiver.

1|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 How to calculate the GST payment to be made?
Usually, the Input Tax Credit should be reduced from Outward Tax Liability to calculate the total GST
payment to be made. TDS/TCS will be reduced from the total GST to arrive at the net payable figure.
Interest & late fees (if any) will be added to arrive at the final amount.

Also, ITC cannot be claimed on interest and late fees. Both Interest and late fees are required to be paid
in cash. The way the calculation is to be done is different for different types of dealers –

Regular Dealer :- A regular dealer is liable to pay GST on the outward supplies made and can also claim
Input Tax Credit (ITC) on the purchases made by him. The GST payable by a regular dealer is the
difference between the outward tax liability and the ITC.

Composition Dealer :- The GST payment for a composition dealer is comparatively simpler. A dealer who
has opted for composition scheme has to pay a fixed percentage of GST on the total outward supplies
made. GST is to be paid based on the type of business of a composition dealer.

Who should make the payment?

These dealers are required to make GST payment –
 A Registered dealer is required to make GST payment if GST liability exists.
 Registered dealer required to pay tax under Reverse Charge Mechanism(RCM).
 E-commerce operator is required to collect and pay TCS
 Dealers required deducting TDS
When should GST payment be made?
GST payment is to be made when the GSTR 3 is filed i.e by 20th of the next month.

2|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 What are the electronic ledgers?

Electronic Liability Ledger

The electronic liability ledger shows the total tax liability of a registered person at any point of
time. This detail can be accessed on the GST portal of a registered taxpayer.

Particulars Serial Number for reference

Amount of tax payable A

Interest and late fee B

Amount of tax payable along with interest on account of mismatch of credit based on
C
provisions of Section 29 or Section 29A or Section 43C

3|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

Any other amount payable by the taxpayer or directed by the Board on account of any
D
proceedings carried out

TDS E

TCS F

Tax under reverse charge G

Amount payable by department against any interest, refund, late fee or any other amount
H
determined under the proceedings under this Act

Balance in the Electronic Tax Liability Ledger = A+B+C+D

Electronic Cash Ledger

An Electronic cash ledger will also be maintained on the GST portal. It will display the total
amount deposited by the taxpayer towards discharge of his tax liability or interest or late fee or
penalty any other amounts. Also, it is now mandatory for businesses making payment for more
than Rs 10,000 to do it electronically.
Form PMT-09 enables a registered person under GST to transfer any amount of tax, interest,
penalty, etc. that is available in the electronic cash ledger, to the relevant tax or cess head such as
IGST, CGST and SGST in the electronic cash ledger.

4|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 Electronic credit ledger
All the taxes paid on the inputs would be recorded in the electronic credit ledger. The input tax
credit in each of the cases mentioned below, shall also be transferred to the electronic credit
ledger:
 ITC available to the branch for the amount of credit transferred by ISD

 ITC allowed on input held in stock and the semi-finished or finished goods would be
credited to the electronic credit ledger if the taxpayer applied for registration within 30
days of becoming liable to pay tax.

 ITC available on the input held in stock and semi-finished or finished goods by a
taxpayer in the composition scheme converting to a normal taxpayer shall be transferred
to electronic credit ledger.

 ITC available due to the taxes paid under the reverse charge mechanism shall also be
transferred to the electronic credit ledger.

 ITC available on goods/services used for the business and other purposes shall only be
allowed to the extent applicable for business purposes.

 All the payments under GST have to be made by either using the input tax credit
available in the electronic credit ledger or through the electronic cash ledger.
How to make GST payment?
GST payment can be made in 2 ways:-
 Payment through Credit Ledger
The credit of ITC can be taken by dealers for GST payment. The credit can be taken only for
payment of Tax. Interest, penalty and late fees cannot be paid by utilizing ITC.
 Payment through Cash Ledger
GST payment can be made online or offline. The challan has to be generated on GST Portal for
both online and offline GST payment. Where tax liability is more than Rs 10,000, it is mandatory
to pay taxes Online.

5|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 What is the penalty for non-payment or delayed payment?
If GST is short paid, unpaid or paid late interest at a rate of 18% is required to be paid by the
dealer. Also, a penalty to be paid. The penalty is higher of Rs. 10,000 or 10% of the tax short
paid or unpaid.

B. Refunds
What is GST refund?
Usually when the GST paid is more than the GST liability a situation of claiming GST refund
arises. Under GST the process of claiming a refund is standardized to avoid confusion. The
process is online and time limits have also been set for the same.

When can the refund be claimed?

There are many cases where refund can be claimed. Here are some of them – Excess payment of
tax is made due to mistake or omission:-
 Dealer Exports (including deemed export) goods/services under claim of rebate or
Refund
 ITC accumulation due to output being tax exempt or nil-rated
 Refund of tax paid on purchases made by Embassies or UN bodies
 Tax Refund for International Tourists
 Finalization of provisional assessment
How to calculate GST refund?
Let’s take a simple case of excess tax payment made. Mr. B’s GST liability for the month of
September is Rs 50000. But due to mistake, Mr. B made a GST payment of Rs 5 lakh. Now Mr.
B has made an excess GST payment of Rs 4.5 lakh which can be claimed as a refund by him.
The time limit for claiming the refund is 2 years from the date of payment.

6|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 What is the time limit for claiming the refund?
The time limit for claiming a refund is 2 years from relevant date. The relevant date is different
in every case. Here are the relevant dates for some cases: -

Reason for claiming GST Refund Relevant Date

Excess payment of GST Date of payment

Export or deemed export of goods or services Date of dispatch/loading/passing the frontier

ITC accumulates as output is tax exempt or nil-rated Last date of financial year to which the credit belongs

Finalization of provisional assessment Date on which tax is adjusted

Note:- If refund is paid with delay an interest of 24% p.a. is payable by the government.

How to claim GST refund?

The refund application has to be made in Form RFD 01 within 2 years from relevant date. The
form should also be certified by a Chartered Accountant.

7|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 GST Return
A GST return is an official record that contains all the information about purchases, sales, taxes
paid on purchases, and taxes received on sales of a product or service rendered by the business.
Once the GST returns have been submitted, then the business owner should settle their tax debt.
Who should file GST Returns
Under the GST regime, regular businesses having more than Rs.5 crore as annual aggregate
turnover (and taxpayers who have not opted for the QRMP scheme) have to file two monthly
returns and one annual return. This amounts to 25 returns each year.
Taxpayers with a turnover of up to Rs.5 crore have the option to file returns under the QRMP
scheme. The number of GSTR filings for QRMP filers is 9 each year, which include 4 GSTR-1
and GSTR-3B returns each and an annual return. Note that QRMP filers have to pay tax on a
monthly basis even though they are filing returns quarterly. There are also separate
statements/returns required to be filed in special cases such as composition dealers where the
number of GSTR filings is 5 each year (4 statement-cum-challans in CMP-08 and 1 annual return
GSTR-4).
What are the Benefits of filing GST Returns
 Avoid Penalties and Late Fees: Filing on time ensures you avoid these financial burdens.
 Claim Input Tax Credit (ITC): ITC allows businesses to claim credit for the GST paid
on purchases used for business purposes. However, you can only claim ITC if you file your
GST returns.
 Maintain Compliance and Credibility: Regular filing demonstrates your commitment to
tax compliance which in the long term can be beneficial when applying for loans, tenders,
or attracting investors.
 Track Business Performance: The data available from your GST returns can be used to
analyze your business performance, identify areas for improvement, and make informed
financial decisions.
 Reduced Risk of Audits: Timely filing reduces the chances of your business being
selected for an audit by the tax authorities which saves you time, resources, and potential
stress associated with tax audits.
 Streamlined Business Operations: Filing GST returns regularly helps maintain organized
financial records and simplifies tax compliance for your business.

8|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

Here is a list of all the returns to be filed as prescribed under the GST Law along with the
due dates.

Return Description Frequency Due Date

Form

GSTR-1 Details of outward Monthly 11th of the next month.

supplies of taxable
Quarterly (If 13th of the month succeeding
goods and/or services
opted under the the quarter.
affected.
QRMP scheme)

IFF Details of B2B Monthly (for the 13th of the next month.
(Optional supplies of taxable first two months
by goods and/or services of the quarter)
taxpayers affected.
under the
QRMP
scheme)

GSTR-3B Summary return of Monthly 20th of the next month.

outward supplies and
Quarterly (For 22nd or 24th of the month
input tax credit
taxpayers under succeeding the quarter***
claimed, along with
the QRMP
scheme)

9|P ag e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 payment of tax by the
taxpayer.

CMP-08 Statement-cum-challan Quarterly 18th of the month succeeding

to make a tax payment the quarter.
by a taxpayer
registered under the
composition scheme
under Section 10 of the
CGST Act.

GSTR-4 Return for a taxpayer Annually 30th of the month succeeding

registered under the a financial year.
composition scheme
under Section 10 of the
CGST Act.

GSTR-5 Return to be filed by a Monthly 20th of the next month.

non-resident taxable (Amended to 13th by Budget
person. 2022; yet to be notified by
CBIC.)

GSTR-5A Return to be filed by Monthly 20th of the next month.

non-resident OIDAR
service providers.

10 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 GSTR-6 Return for an input Monthly 13th of the next month.
service distributor to
distribute the eligible
input tax credit to its
branches.

GSTR-7 Return to be filed by Monthly 10th of the next month.

registered persons
deducting tax at source
(TDS).

GSTR-8 Return to be filed by e- Monthly 10th of the next month.

commerce operators
containing details of
supplies effected and
the amount of tax
collected at source by
them.

GSTR-9 Annual return by a Annually 31st December of the next

regular taxpayer. financial year.

GSTR-9C Self-certified Annually 31st December of the next

reconciliation financial year.
statement.

11 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

 GSTR-10 Final return to be filed Once, when the Within three months of the
by a taxpayer whose GST registration date of cancellation or date
GST registration is is cancelled or of cancellation order,
cancelled. surrendered. whichever is later.

GSTR-11 Details of inward Monthly 28th of the month following

supplies to be the month for which
furnished by a person statement is filed.
having UIN and
claiming a refund

ITC-04 Statement to be filed Annually 25th April where AATO is

by a principal/job- (for AATO up to up to Rs.5 crore.
worker about details of Rs.5 crore)
goods sent to/received
from a job-worker
Half-yearly 25th October and 25th April
(for AATO > Rs.5 where AATO exceeds Rs.5
crore) crore.

(AATO = Annual aggregate

turnover)

Late filing of GST Returns

Return filing is mandatory under GST. Even if there is no transaction, you must file a Nil return.
There are few points to note:

12 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi

  You cannot file a return if you do not file the previous month/quarter’s return.
 Hence, late filing of GST return will have a cascading effect leading to heavy fines and
penalty.
 The late filing fee of the GSTR-1 is populated in the liability ledger of GSTR-3B filed
immediately after such delay.

How to file GST Returns Online

Filing your GST returns is a simple process, and the government has made provisions for you to
do it online, saving valuable time and effort. To understand the GST Returns filing process, just
follow the steps below:
Step 1: Go to the official GST website at [Link] and log in with your credentials
Step 2: Once logged in, you will be redirected to the “Dashboard.” Then click on “Continue to
Dashboard.
Step 3: Thoroughly check your ledger balance, if any, and click on the tab of “File Returns”
Step 4: Enter the financial year, the return filing period in the designated space, and click on
“Search”
Step 5: Select the type of return you wish to file, for eg., GSTR - 1 or 3B, and then click on
“Prepare Online.
Step 6: Based on your tax liability, pick the appropriate choice. If you have no liability, click on
the “File Nil GSTR option and click on File Statement
Step 7: Confirm the check box in this part of the GST return filing process. See if all the data is
correct or not.
Step 8: Go to the dropdown menu and select the authorised signatory
Step 9: Select the File with EVC; option, and provide the OTP you receive on your registered
mobile

13 | P a g e Mr. Gaurav Kumar Bisen, Assistant Professor, SMS Varanasi