The document discusses payment of Goods and Service Tax (GST) in India, including input tax credit, output tax, electronic ledgers for payment of taxes, interest on delayed payments, tax deduction at source, and refund of GST. It explains the process by which a taxpayer pays GST, including using input tax credits to offset output tax liability and depositing any remaining amount due. It also summarizes provisions around refunds of GST paid.

1. By Shobhit Kesharwani
C.A., B.Com

2. Payment of Goods & Service
Tax(GST)
Introduction

3. Sells Mobile to
Mr. B
Collects
Rs.10,000+1200
(12%GST)
=Rs.11,200
Purchase
Mobile from
Mr. A
& Paid
Rs.10,000+1200
(12%GST)
Total=Rs.11,200
Purchase
Mobile of
Rs.
12,000+1,440
(12%GST)
=Rs.13,440
Mr. A
Seller-1
Mr. B
Buyer-1
Mr. C
Buyer-2
Mr. B
Seller-2
Sells Mobile to
Mr. C
& Collects
Rs.
12,000+1,440
(12%GST)
=Rs.13,440

4. Here
Mr. B purchased mobile of Rs. 11,200 & tax paid of Rs.
1,200, so this tax is called Input Tax Credit for Mr. B.
&
When Mr. B Sold that Mobile of Rs. 13,440 on which he
collected tax of Rs.1,440, here 1,440 is called Output Tax
for Mr. B.
So finally we see Mr. B has collected of Rs. 1,440 which
he need to deposit to the government.

5. So we seen that Mr. B need to deposit Rs.1,440 to the
government, so here Mr. B will deposit like this.
Step-1: He will check what amount of Input Tax he has
paid, he found Rs.1,200 he paid as Input Tax which will be
credited to Electronic Credit Ledger.
Step-2: Now he will see total Output Tax liability is Rs.
1,440, Out of which he has Input tax credit in Electronic
credit ledger of Rs. 1,200, so balance is Rs. 240 short, now
this tax he has to pay in cash, so he deposit Rs.240 into
Electronic cash ledger.
Now Total Rs. 1440 paid (Rs. 1200 through electronic
credit ledger + Rs. 240 through electronic cash ledger)

6. Payment of Tax (Chapter X)
Sec.49: Payment
of Tax, Interest,
Penalty & Other
amount
Sec. 50: Interest
on Delayed
Payment of Tax
Sec. 51: Tax
Deduction at
source
Sec. 52:
Collection of Tax
at Source
Sec. 53: Transfer
of Input Tax
Credit

7. Payment of Tax (Chapter X)
Rule 85
Electronic
Liability Register
Rule 86
Electronic Credit
Ledger
Rule 87
Electronic Cash
Ledger
Rule 88
Identification of
Each Transaction

8. Electronic Liability Register

9. Rule 85 Electronic Liability Register
 The electronic liability register specified under sub-
section (7) of section 49 shall be maintained in FORM
GST PMT-01 for each person liable to pay tax,
interest, penalty, late fee or any other amount on
the common portal and all amounts payable by him
shall be debited to the said register.

10. Rule 85(2) Electronic Liability Register
The electronic liability register of the person shall be
debited by-
(a) amount payable towards tax, interest, late fee or any
other amount payable as per the return furnished by
the said person;
(b) the amount of tax, interest, penalty or any other amount
payable as determined by a proper officer in pursuance of
any proceedings under the Act
(c) the amount of tax and interest payable as a result of
mismatch under section 42 or section 43 or section 50; or
(d) any amount of interest that may accrue from time to
time.

11. Rule 85(3): Rules for Paying Taxes from Electronic Cash Ledger &
Credit Ledger
 Subject to the provisions of section 49, [section 49A
and section 49B], payment of every liability by a
registered person as per his return shall be made
by debiting the electronic credit ledger
maintained as per rule 86 or the electronic cash
ledger maintained as per rule 87 and the electronic
liability register shall be credited accordingly.

12. Rule 85(4)
 The amount deducted under section 51(TDS) , or the
amount collected under section 52(TCS) , or
 the amount payable on reverse charge basis, or
 the amount payable under section 10,
 any amount payable towards interest, penalty, fee or
 any other amount under the Act shall be paid by
debiting the electronic cash ledger maintained as
per rule 87 and the electronic liability register shall
be credited accordingly

13. Maintenance of Taxpayer-wise
Electronic Ledger
2 Types of Ledger is Maintained for Customer:
 Electronic Cash Ledger
 Electronic Credit Ledger

14. Electronic Cash Ledger
(It functions like Paytm Wallet)
As per Subsection (1) of Section 49 of CGST Act,2017
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 Electronic
Fund Transfer(NEFT) or Real Time Gross
Settlement(RTGS) or by such other mode(over the
Counter upto Rs.10,000 by cash, cheque or draft)
and subject to such conditions and restrictions as may
be prescribed, shall be credited to the electronic cash
ledger of such person to be maintained.

15. Electronic Cash Ledger
 Rule 87 (1) : The electronic cash ledger under sub-section
(1) of section 49 shall be maintained in FORM GST PMT-
05 for each person, liable to pay tax, interest, penalty, late
fee or any other amount, on the common portal for
crediting the amount deposited and debiting the
payment therefrom towards tax, interest, penalty, fee or
any other amount.
 Rule 87(2): Any person, or a person on his behalf, shall
generate a challan in FORM GST PMT06 on the common
portal and enter the details of the amount to be deposited
by him towards tax, interest, penalty, fees or any other
amount.

16. Electronic Credit Ledger
 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, to be
maintained in FORM GST PMT-02.

17. Rule 86A: Conditions of use of amount available
in electronic credit ledger
 The Commissioner or an officer authorised by him in
this behalf, not below the rank of an Assistant
Commissioner, having reasons to believe that credit of
input tax available in the electronic credit ledger has
been fraudulently availed or is ineligible in as much as:

18. Rule 86A: Conditions of use of amount
available in electronic credit ledger
a) the credit of input tax has been availed on the strength of tax
invoices or debit notes or any other document prescribed under
rule 36-
i. issued by a registered person who has been found non-
existent or not to be conducting any business from any place
for which registration has been obtained; or
ii. without receipt of goods or services or both; or
b) the credit of input tax has been availed on the strength of tax
invoices or debit notes or any other document prescribed under
rule 36 in respect of any supply, the tax charged in respect of
which has not been paid to the Government; or

19. Rule 86A: Conditions of use of amount
available in electronic credit ledger
c) the registered person availing the credit of input tax has
been found non-existent or not to be conducting any
business from any place for which registration has been
obtained; or
d) the registered person availing any credit of input tax is
not in possession of a tax invoice or debit note or any
other document prescribed under rule 36,
may, for reasons to be recorded in writing, not allow debit
of an amount equivalent to such credit in electronic credit
ledger for discharge of any liability under section 49 or for
claim of any refund of any unutilised amount.

20. Electronic Credit Ledger
 2)The Commissioner, or the officer authorised by him
under sub-rule (1) may, upon being satisfied that
conditions for disallowing debit of electronic credit
ledger as above, no longer exist, allow such debit.
 (3) Such restriction shall cease to have effect after the
expiry of a period of one year from the date of
imposing such restriction.

21. Rule 88A: Order of ITC Utilisation Rules
(Electronic Credit Ledger)
 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;
 The Central tax shall first be utilised towards payment of
central tax and the amount remaining, if any, may be
utilised towards the payment of integrated tax;
 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;

22. ITC Utilisation Rules
 The Central tax shall not be utilised towards
payment of State tax or Union territory tax; and
 The State tax or Union territory tax shall not be
utilised towards payment of central tax.

23. ITC Utilisation Rules
Input Tax Preference Output Tax
IGST 1st
2nd
3rd
IGST
CGST
SGST
CGST 1st
2nd
CGST
IGST
SGST 1st
2nd
SGST
IGST

24. Provision of Interest on Delayed
Payment of Tax
 As per Section 50 (1) of CGST Act, 2017 Every person
who is liable to pay tax in accordance with the
provisions of this Act or the rules made thereunder,
but fails to pay the tax or any part thereof to the
Government within the period prescribed, shall for the
period for which the tax or any part thereof remains
unpaid, pay, on his own, interest at such rate, not
exceeding eighteen per cent., as may be notified by
the Government on the recommendations of the
Council.

25. Provision of Interest on Delayed
Payment of Tax
(2) The interest under sub-section (1) shall be
calculated, in such manner as may be prescribed, 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 or excess reduction in
output tax liability 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.

26. Provisions of TDS
 The Government may mandate,–
 (a) a department or establishment of the Central
Government or State Government; or
 (b) local authority; or
 (c) Governmental agencies; or
 (d) such persons or category of persons as may be notified
by the Government on the recommendations of the
Council,
to deduct tax at the rate of one per cent. from the payment
made or credited to the supplier of taxable goods or services
or both, where the total value of such supply, under a
contract, exceeds two lakh and fifty thousand rupees:

27. Provisions of TDS
 Provided that no deduction shall be made if the location
of the supplier and the place of supply is in a State
which is different from the State.
Explanation.–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.

28. Provisions of TDS
 (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.
 (4) If any deductor fails to furnish to the deductee the
certificate, after deducting the TDS, 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 days period until the failure is rectified, subject
to a maximum amount of five thousand rupees.

29. Provisions of TDS
 (5) The deductee shall claim credit, in his
electronic cash ledger, of the tax deducted and
reflected in the return of the deductor furnished
.
 (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.

30. Provisions of TDS
 (7) The determination of the amount in default
under this section shall be made in the manner
specified in section 73 or section 74.
 (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:

31. Refund of Goods & ServiceTax (GST)

32. Refund of Tax (Chapter XI)
Sec.54 Refund
of Tax
Sec.55 Refund
in Certain
Cases
Sec.56 Interest
on Delayed
Refunds
Sec.57
Consumer
Welfare Fund
Sec.58
Utilisation of
Fund

33. Meaning of Refund
 “refund” includes refund of tax paid on zero-rated
supplies of goods or services or both or
 on inputs or input services used in making such
zero-rated supplies, or
 refund of tax on the supply of goods regarded as
deemed exports, or refund of unutilised input tax
credit as provided under sub-section (3).

34. Sec.54(1): Who can Apply for GST Refund
 Any person paid tax or Interest may make an
application before the expiry of two years from the
relevant date in such form and manner as may be
prescribed(Prescribed in Rule 89)

35. Sec.54(2)
 A Specialised agency of the United Nations
Organisation or
 Any Multilateral Financial Institution and
Organisation notified under the United Nations
(Privileges and Immunities)Act, 1947,
 Consulate or Embassy of foreign countries or
 Any other person or Class of persons, as notified under
section 55,
entitled to a refund of tax paid by it on inward supplies of
goods or services or both, may make an application before
the expiry of six months from the last day of the quarter in
which such supply was received.

36. Sec.54(3): Refund of Unutilised ITC Credit Ledger
at the end of Tax Period for
 Zero rated supplies made without payment of tax;
 Inverted Tax Structure
Sub-section (3) of Section 54 of the CGST Act provides that refund of any
unutilized ITC may be claimed where the credit has accumulated on account of
rate of tax on inputs being higher than the rate of tax on output supplies.
 Example: An applicant trading in goods has purchased, say goods “X” attracting
18% GST. However, subsequently, the rate of GST on “X” has been reduced to say
12%. the input and output being the same in such cases, though attracting
different tax rates at different points in time, do not get covered under the
provisions of clause (ii) of Sub-section (3) of Section 54 of the CGST Act. It is
hereby clarified that refund of accumulated ITC under clause (ii) of Sub-section
(3) of Section 54 of the CGST Act would not be applicable in cases where the
input and the output supplies are the same.

37. Sec.54(3): Refund of Unutilised ITC Credit
Ledger at the end of Tax Period
o Provided No Refund allowed where goods exported
out of India are subjected to export duty.
o Provided also that no refund of input tax credit shall
be allowed, if the supplier of goods or services or
both avails of drawback in respect of central tax or
claims refund of the integrated tax paid on such
supplies.

38. Sec.54(4): Application of Refund Shall
Accompanied Documents
 Documentary or other evidence (including the
documents referred to in section 33) as the applicant may
furnish to establish that the amount of tax and interest,
if any, paid on such tax or any other amount paid in
relation to which such refund is claimed was collected
from, or paid by, him and the incidence of such tax and
interest had not been passed on to any other person.
 Where Refund Amount< Rs. 2 Lakhs,
no documentary Evidence required, Only self declaration
is required of Incidence of Tax Paid.

39. Sec.54(5): Refund admissible transferred to
Consumer Welfare Fund(Sec.57)
 If, on receipt of any such application, the proper officer
is satisfied that the whole
 or part of the amount claimed as refund is refundable,
he may make an order accordingly and
 the amount so determined shall be credited to the
Fund referred to in section 57(Consumer Welfare
Fund).

40. Sec.54(6): Provisional Refund
 Notwithstanding anything contained in sec.54(5), the proper
officer may, in the case of any claim for refund on account of
zero-rated supply of goods or services or both made by
registered persons, other than such category of registered
persons as may be notified by the Government on the
recommendations of the Council, refund on a provisional basis
 (i) 90% refund on a provisional basis of the total amount so
claimed, excluding the amount of input tax credit provisionally
accepted.
Note: It will directly transferred to applicant.
 (ii) Thereafter make an order under sub-section (5) for final
settlement of the refund claim after due verification of
documents furnished by the applicant.

41. Sec.54(7): Time Limit for Issuing Order of Refund
 The proper officer shall issue the order under sub-
section (5) within sixty days from the date of receipt
of application complete in all respects

42. Sec.54(8): Refund Directly paid to Applicant
 Notwithstanding anything contained in sub-section
(5), the refundable amount shall, instead of being
credited to the Fund, be paid to the applicant, if
such amount is relatable to—
 (a) refund of tax paid on zero-rated supplies of
goods or services or both or on inputs or input
services used in making such zero-rated supplies;
 (b) refund of unutilised input tax credit under sub-
section (3);

43. Sec.54(8): Refund Directly paid to Applicant
 (c) refund of tax paid on a supply which is not provided,
either wholly or partially, and for which invoice has not
been issued, or where a refund voucher has been
issued;(Advance Received)
 (d) refund of tax in pursuance of section 77;
 (e) the tax and interest, if any, or any other amount paid by
the applicant, if he had not passed on the incidence of
such tax and interest to any other person; or
 (f) the tax or interest borne by such other class of
applicants as the Government may, on the
recommendations of the Council, by notification,
specify.

44. Sec.54(9)
 Notwithstanding anything to the contrary contained
in any judgment, decree, order or direction of the
Appellate Tribunal or any court or in any other
provisions of this Act or the rules made thereunder or
in any other law for the time being in force, no refund
shall be made except in accordance with the
provisions of sub-section (8).

45. Sec.54(10): Withholding of Refund on default of
furnishing return & payment of Tax
 Where any refund is due under sub-section (3) to a
registered person who has defaulted in furnishing any
return or who is required to pay any tax, interest or penalty,
which has not been stayed by any court, Tribunal or
Appellate Authority by the specified date, the
 proper officer may—
 (a) withhold payment of refund due until the said
person has furnished the return or paid the tax, interest
or penalty, as the case may be;
 (b) deduct from the refund due, any tax, interest,
penalty, fee or any other amount
 which the taxable person liable to pay but which remains
unpaid under this Act or under the existing law.

46. Sec.54(11): Withholding of Refund if any
proceedings is pending
 Where an order giving rise to a refund is the subject
matter of an appeal or further proceedings or where
any other proceedings under this Act is pending and
 The Commissioner is of the opinion that grant of such
refund is likely to adversely affect the revenue in the
said appeal or other proceedings on account of
malfeasance or fraud committed, he may, after giving
the taxable person an opportunity of being heard,
withhold the refund till such time as he may
determine.

47. Sec.54(12) : Interest on Withholding Refund u/s
54(11)
 Where a refund is withheld under sub-section (11),
the taxable person shall,
 notwithstanding anything contained in section 56, be
entitled to interest at such rate not exceeding six
per cent. as may be notified on the recommendations
of the Council, if as a result of the appeal or further
proceedings he becomes entitled to refund.

48. Sec.54(13): Refund for Casual taxable
Person & Non Resident Taxable Person
 Notwithstanding anything to the contrary contained
in this section, the amount
 of advance tax deposited by a casual taxable
person or a non-resident taxable person under
 sub-section (2) of section 27, shall not be refunded
unless such person has, in respect of the
 entire period for which the certificate of registration
granted to him had remained in force,
 furnished all the returns required under section
39.

49. Sec.54(14): No Refund if Amount<Rs.1000
 Notwithstanding anything contained in this section,
no refund under sub-section (5)
 or sub-section (6) shall be paid to an applicant, if the
amount is less than one thousand rupees

50. Thank You
CA. Shobhit Kesharwani
Mob. No. 8127093035
Email Id: shobhitkesarwani3035@gmail.com,
ca.shobhitkesharwaniandco@gmail.com