Understanding the Payment Process Under GST

NEW DELHI, May 22, 2017 /PRNewswire/ --

"Goods and Services Tax will not only create a unified network of all the entities involved in a taxable supply chain, but it is also expected to digitize business in India to a great extent. It is going to change how India does business today," said Manoj Yadav, Director-Indirect Tax at Neeraj Bhagat & Co., Chartered Accountants.

Companies have recently witnessed various initiatives by the government towards digitization of the economy. One major step toward digitization of economy is the introduction of compliance procedures under Goods and Services Tax, completely on a digital and online platform.

Goods and Services Tax Network (GSTN) has been setup with the objective of providing IT infrastructure for GST implementation in India.

Accordingly, provisions have been made in GST law which requires filing of all returns under GST through GST Portal only. On similar lines, it will become mandatory to make payments in excess of Rs. 10,000 through online mode. The government is also planning to enable payment of GST liability by way of Debit and Credit Card.

It will not be surprising to see Aadhar cards or mobile wallets such as BHIM being used for digital payment of tax liability under GST regime.

Government have brought forward some of the key provisions as contained under Model GST law for making payment of taxes.

Electronic Tax Liability Register
Under GST law, every registered taxable person is required to maintain an electronic tax liability register in the prescribed FORM GST PMT-1 on GST portal in electronic format. All amount payable under GST will be debited from this register.

Following are some of the payments that can be debited from the Electronic Tax Liability Register of a registered taxable person under GST regime: 

- The amount payable towards tax, interest, late fee or any other amount payable as per the return filed by any taxable person;
- The amount of tax, interest, penalty or any other amount payable as determined by an officer of the GST law on registered taxable person;
- Any amount of tax and interest payable as a result of mismatch under GST law;
- Any amount of interest that may be required to be paid under the GST law.

Accounting Treatment 

Model GST law requires that any of the above-mentioned payment has to be made by way of debiting the Electronic Credit Ledger or Electronic Cash Ledger and crediting the Electronic Tax Liability register.