Since the introduction of the Goods and Services Tax (GST) on July 1, 2017, one issue that has continually been in the limelight is returns filing. GST introduced a host of new requirements for returns, and mistakes or non-compliance result in interest and penalties for businesses, as well as negative rating under GST.

  ♦  Payment of Taxes:

As per section 49 of CGST Act, every registered person will make deposit in Form GST PMT-06 towards payment of tax, interest, penalty or fees through:

(a) Internet banking through authorized banks;

(b) Debit/credit card through authorized banks after registering on common portal;

(c) NEFT or RTGS

(d) Over the Counter payment up to ₹ 10,000 through authorized banks restricted to per challan, per tax period by cash, cheque, or demand draft, except where payments are made by:

i) Government Departments or any other deposit to be made by persons as may be notified by the Commissioner in this behalf;

ii) Proper officer or any other officer authorised to recover outstanding dues from any person, whether registered or not, including recovery made through attachment or sale of movable or immovable properties;

iii) Proper officer or any other officer authorised for the amounts collected by way of cash, cheque or demand draft during any investigation or enforcement activity or any ad hoc deposit.

Electronic cash ledger as maintained in Form GST PMT 05 shall be debited by amount pertaining to:

(a) Amount payable toward tax, interest, penalty, fees or any other amount payable as per return;

(b) Amount payable toward tax, interest, penalty, fees or any other amount payable as determined by proper officer in pursuance of any proceedings;

(c) Amount of tax and interest payable as a result of any mismatch;

(d) Any amount of interest that may accrue from time to time;

(e) Amount tax deducted under section 37 i.e. TDS;

(f) Amount tax collected under section 43C i.e. TCS;

(g) Amount payable under section 7(3) i.e. RCM;

(h) Amount payable under section 8 i.e. Composition.

  ♦  Amount payable through cash ledger shall be determined after adjusting amount if any available under electronic credit ledger in Form GST PMT-2 which will be adjusted against payment of "Tax" only.

  ♦  Balance unutilised amount if any, under electronic cash 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.

  ♦  Due date for payment of tax has been linked with filling of return i.e. GSTR-3 (not yet functional) or GSTR-3B i.e. on or before 20th of next month for all registered person except person registered under composition.

Revised DUE DATES for GSTR - 3B for the period from January'2020 to September'2020 as per Notification 07/2020-CT dated 03-02-2020 alongwith 29/2020-CT dated 23-03-2020:

However following period returns were extended through notifications:

  ♦  In case of self assessment for outstanding liabilities before issuance of show cause notice, voluntary payment of tax and interest as self assessed can be made and the same must be intimated to proper officer by filing DRC-03.

  ♦  In case notice has already been issued, DRC-03 for payment of tax with interest should be filed within 30 days of issue of SCN.

  ♦  TAX DEDUCTION AT SOURCE (TDS):

In order to make it simpler for businesses in the initial months of rollout, GST Council in its meeting on March 10, 2018 had deferred the TDS provisions of GST laws and thus were kept in abeyance till June 30, 2018. Provisions for TDS were then made applicable from 1st day of October 2018 (Notification No. 50/2018 CT). As per Section 51 of CGST Act, following persons are liable (deductor) for taxable supplies received to deduct tax @ 1% on payment made or credited to supplier (Deductee) exceeding Rupees Two lakh Fifty thousand (i.e. the limit of Rs. Two Lakh Fifty Thousand will be for each contract);

1. Department or establishment of Central or State Government,

2. Local authority,

3. Governmental Agencies,

4. Person or category of person notified (Not. 33/2017-CGST 15/09/2017):

a. An authority or a board or any other body, —

i. set up by an Act of Parliament or a State Legislature; or

ii. established by any Government, with fifty-one per cent 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);

c. public sector undertakings:

Provision shall not apply to supply of goods/services,

1. from one PSU to another PSU. (Notification No. 61/2018) and

2. from one person to another person specified under (1) to (4) above. (Notification No. 73/2018)

  ♦  Deductor is required to take registration [Sec 24(vi)]

  ♦  Deduct tax while making/crediting payment to the supplier

  ♦  Due date for payment is 10th of next month, in which tax has been deducted.

  ♦  Person responsible for deduction of tax at source are required to make payment through form GSTR-7 on value of supply excluding GST.

  ♦  Furnish system generated TDS certificate in Form GSTR-7A to the deductee within 5 days of crediting payment of TDS to the Government i.e. furnishing FORM GSTR-7

Late fee, Interest, Penalty (payable by the deductor) & Refund

  ♦  Fails to make payment of deducted tax:

  ♦  Both deducted tax and interest to be paid [Sec 50(1) read with Sec 51(6)]

  ♦  Fails to furnish FORM GSTR-7 within due date:

■ Late fee payable (Section 47(1)): ₹ 100/- + ₹ 100/- per day (Maximum ₹ 5000/-) under CGST Act & SGST/UTGST Act separately

  ♦  Fails to furnish FORM GSTR-7A within due date:

■ Late fee payable [Section 51(4)]: ₹ 100/- + ₹ 100/- per day (Maximum ₹ 5000/-) under CGST Act & SGST/UTGST Act separately

■ In such cases recovery may be initiated u/s 73 or 74

  ♦  Deductee shall claim credit of TDS deducted in his electronic cash ledger.

  ♦  Any excess or erroneous payment will be eligible for refund subject to provision of section 54 of CGST Act.

  ♦  Refund may be claimed by the deductor/deductee as the case may be if excess tax gets credited to the deductee then no refund shall be granted to the deductor

  ♦  Situations when Tax deduction is not required:

  a) Total value of taxable supply ≤ ₹ 2.5 Lakh under a contract.

  b) Contract value > ₹ 2.5 Lakh for both taxable supply and exempted supply, but the value of taxable supply under the said contract ≤ ₹ 2.5 Lakh.

  c) Receipt of services which are exempted. For example services exempted under notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended from time to time.

  d) Receipt of goods which are exempted. For example goods exempted under notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 as amended from time to time.

  e) Goods on which GST is not leviable. For example petrol, diesel, petroleum crude, natural gas, aviation turbine fuel (ATF) and alcohol for human consumption.

  f) Where a supplier had issued an invoice for any sale of goods in respect of which tax was required to be deducted at source under the VAT Law before 01.07.2017, but where payment for such sale is made on or after 01.07.2017 [Section 142(13) refers].

  g) All activities or transactions specified in Schedule III of the CGST/SGST Acts 2017, irrespective of the value.

  h) Where the payment relates to a tax invoice that has been issued before 01.10.2018.

  i) Where any amount was paid in advance prior to 01.10.2018 and the tax invoice has been issued on or after 01.10.18, to the extent of advance payment made before 01.10.2018.

  j) Where the tax is to be paid on reverse charge by the recipient i.e. the deductee.

  k) Where the payment is made to an unregistered supplier.

  l) Where the payment relates to "Cess" component.

  ♦  TAX COLLECTION AT SOURCE (TCS):

In order to make it simpler for businesses in the initial months of rollout, GST Council in its meeting on March 10, 2018 had deferred the TDS provisions of GST laws and thus were kept in abeyance till June 30, 2018. Provisions for TCS are applicable from 1st day of October 2018 (Notification No. 51/2018 CT). As per section 52 of CGST Act, TCS is required to be deposited by e-commerce operator on "Net Value of Taxable Supplies" made through it by other supplier and consideration for such supply is collected by operator.

  ♦  Rate of tax will be notified by government but shall not exceed 1%.

  ♦  Net value of taxable supplies will be calculated on monthly basis i.e. aggregate value of taxable supply made less aggregate value of taxable supplies returned, but shall not include supplies covered under section 9(5) of CGST Act, i.e. supply of notified services on which e-commerce operator is liable to pay tax.

  ♦  Due date for payment is 10th of next month, in which tax has been deducted.

  ♦  Monthly statement in From GSTR-8 required to fill electronically for outward supplies made as well as returned and amount collected. However following period returns were extended through notification:

  ♦  Every operator who collects the amount specified in sub-section (1) shall furnish an annual statement, electronically before the thirty first day of December following the end of such financial year.

  ♦  Supplier supplying through e-commerce operator will claim credit of TCS paid in his electronic cash ledger.

  ♦  Operator to maintain following details:

 i.   Supplies effected by such operator during any period; or

 ii.   Stock of goods held by operator in his godown or warehouses managed by operator for making supplies, where supplier has declared said place as additional place of business.

  ♦  Operator to produce furnish details within 15 days on service of notice, else will be liable for penalty which may extend to ₹ 25,000/-

  ♦  INTEREST ON DELAY PAYMENT OF TAX :

As per section 50 of CGST Act, every person is liable to pay interest as notified as per 13/2017-CGST w.e.f. 01/07/2017 on following counts:

Interest will be calculated from the date succeeding the day on which such tax was due to be paid.

With COVID-19 outbreak and lockdown as announced by central government CBIC issued Notification No. 31/2020- Central Tax dated 3rd April 2020 & Notification No. 32/2020-Central Tax dated 3rd April 2020 whereby it waived/lowered the interest payable & waived the Late Fees payable , for the class of registered persons, who are required to furnish the returns in FORM GSTR-3B as under:

Note :

  1. In case returns are filed after the extended date, then interest is payable @18% for the full period from the original due date.

  2. In case returns are filed after extended date, then late fees is payable for the full period from the original due date

  ♦  Legal Update

Interest on delayed payment of tax shall be levied on gross amount (i.e. both tax payable and ITC component) in case of delay in filing of GST return 3B (as supported by High Court of Telangana- Megha Engineering & Infrastructures Ltd. v. Commissioner of Central Tax).

Although Proviso has been added to Section 50(1) that the interest on delayed payment of tax to be levied on Net amount instead of Gross amount vide Finance (No.2) Act 2019 from the date which was yet to be notified. Recently in the 39th GST Council Meeting dated 14-03-2020 it was decided to give effect of the said Provision w.e.f. 01-07-2017.The Press Release for the same has already been issued. One has to wait till final approval from Parliament.

❑❑