The GST payment rules require an individual or a business to fill GSTR-3B to report the ITC, along with GSTR-1 to enumerate sales. The refund can also be claimed by filing the necessary documents.
The GST paid can be classified into three different taxes:
There are other types of taxes, excluding the ones mentioned above, that a taxpayer is liable to pay:
For example, if a dealer is acquiring services at 1,00,000, he will deduct a certain amount. Let’s assume it is TDS @ 1% (10,000) then, he is to pay the supplier after deducting the said amount.
The Input Tax Credit should be subtracted from the Outward Tax Liability to calculate the total GST payment. TDS/TCS will be deducted from the total GST to determine the net payable amount. The final amount will include interest and late fees (if applicable).
The ITC is different for different dealers, such as:
These dealers are required to make GST payments –
GST payment is made by the 20th of the next month by filing GSTR 3
These ledgers are maintained electronically on the GST website.
The payment can be made in the following two ways:
Dealers can use their ITC credit to pay their GST. The credit can only be used to pay taxes. ITC cannot be used to pay interest, penalties, or late fees.
GST can be paid online or in person. The challan must be generated on the GST Portal for online and offline payments. It is mandatory to pay taxes online if the tax liability exceeds Rs 10,000.
Note- If GST is underpaid, unpaid, or paid late, the dealer must pay interest at 18%. There is also a penalty to be paid. The penalty is the greater of Rs. 10,000 or 10% of the tax short-paid or unpaid.
When the GST paid exceeds the GST liability, the situation of claiming a GST refund arises. The process of claiming a refund under GST is standardised to avoid confusion. The process is done online, and time limits have been set.
There are numerous situations in which a refund can be obtained. Here are a few examples: Excess tax is paid due to an error or omission.
Consider the simple case of an overpayment of taxes. For the month of September, Mr B’s GST liability is Rs 50000. Mr B, on the other hand, made a GST payment of Rs 5 lakh by mistake. Mr B has now made an excess GST payment of Rs 4.5 lakh, which he can claim as a refund. The refund must be claimed within two years of the date of payment.
The deadline for requesting a refund is two years from the relevant date. In each case, the relevant date is different. For some cases, the relevant dates are as follows:
|Reason for claiming GST Refund||Relevant Date|
|Excess payment of GST||Date of Payment|
|Export or deemed export of goods and services||Date of dispatch/loading/passing the frontier|
|ITC accumulated as output tax which is exempted from tax or nil-rated||Last date of the financial year to which the credit belongs|
|Finalisation of provisional assessment||The date on which tax is adjusted|
The refund application must be submitted in Form RFD 01 within two years of the relevant date. A Chartered Accountant should also sign the form.