[FAQs] on Payment and Refunds under GST

Table of Contents

1. Highlights of the Topic
2. TDS & TCS
3. Refund of GST

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1. Highlights of the Topic

• Sections involved for payment of GST: 49 to 53 of CGST Act.

1.1 Payment of Tax interest, penalty and other amounts

a. Amount of GST paid is credited to E-Cash Ledger.

b. Input tax credit as self-assessed is credited to E-Credit Ledger.

c. Amount in E-credit ledger can be used only for paying Output Tax and in the manner and sequence given here. (Also consider provisions of sections 49A and 49B of CGST Act read with Rule 88A of CGST Rules).

d. Discharge of tax and other dues under this Act or rules made thereunder is in following order :

i. Self-assessed tax and other dues related to returns of previous tax period;

ii. Self-assessed tax and other dues related to return of current tax period;

iii. Any other amount payable under this Act or rules made thereunder including the demand determined under section 73 or section 74.

1.2 Interest on delayed payment of tax

• Rate of interest: 18% p.a.
• However, where taxable person makes an undue or excess claim of Input Tax Credit or undue or excess reduction in output tax liability, the rate of interest shall be 24% p.a.

1.3 Tax Deducted at source (TDS)

• Applicability only in limited cases
• TDS at 1% if total value of taxable supply (excluding taxes) exceeds ` 2,50,000 (Therefore, total TDS is at 2%, 1% being CGST and 1% being SGST)
• No deduction shall be made if location of supplier and the place of supply is in a state or union territory which is different from the state or as the case may be, Union Territory of registration of the recipient.
• Time limit for deposit of TDS: Upto 10th of next month.
• It is mandatory to obtain registration for persons liable to deduct tax at source.

1.4 Tax Collection at Source (TCS)

• E-commerce operator to collect tax at source of the net value of taxable supplies made through it by other suppliers.
• Current Rate of TCS: 1% of net value of taxable supplies (0.5%: CGST & 0.5% SGST).
• Time limit for deposit of tax – Upto 10th of next month.
• E-statement to be filed upto 10th of next month.
• Annual Statement to be filed upto 31st December of succeeding financial year.
• Rectification of mistake in monthly statement by ECO.
• TCS will be claimed by supplier.
• Matching of details furnished by ECO with details furnished by the supplier.
• Communication of discrepancy in details furnished by the E-commerce Operator and the supplier.
• Non-rectification of discrepancy leads to addition of amount of discrepancy to the output tax liability of supplier.
• Interest is payable on amount added to output tax liability of the supplier.
• Issuance of notice to furnish details of supplies and stock.
• Information to be furnished within 15 days from service of notice.
• Penalty for failure to furnish information: upto ` 25,000.
• Non-applicability of TCS provisions:

a. GST is payable under reverse charge.

b. Exempt Supply.

c. Import of goods or services

• Sections involved for REFUND: 54 to 58 of CGST Act
• Concept of “Unjust Enrichment”
• Situations that may necessitate refund claims.
• Cases where refundable amount shall be paid to the applicant instead of being credited to consumer welfare fund.
• Provisions relating to refund of the amount of advance tax deposited by a Casual Taxable Person/Non-Resident Taxable Person.
• Provisions regarding refund of unutilised Input Tax Credit granted to registered person.
• Computation of maximum amount of refund in case of zero-rated supply of goods or services.
• Computation of maximum amount of refund of ITC in case of Inverted duty structure.
• Provisions relating to “Provisional Refund”.
• Refund to UN Bodies, embassies.
• Interest on delayed refunds
• Rate: 6% p.a. if refund is not paid within 60 days from receipt of application. However, if refund is as a consequence of adjudicating/appellate authority order, then interest is at 9% p.a. if refund is not paid within 60 days from receipt of application.
• Provisions relating to Consumer welfare Fund and its utilisation.

2. TDS & TCS