Upload
duongthu
View
230
Download
0
Embed Size (px)
Citation preview
PAYMENT PROCESS UNDER GST REGIME
Model Law GST
SEPTEMBER’2016
GSTPANACEA.COM CONSULTANCY PRIVATE LIMITED
New Delhi
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
1 | P a g e
To get regular updates please share your details on 7503031378
PAYMENT PROCESS UNDER GST REGIME
1. Broad Features .......................................................................................................................................... 2
2. Tax Types & Modes of Payment ............................................................................................................. 4
3. Stakeholders .............................................................................................................................................. 6
4. Basic Features ........................................................................................................................................... 7
5. MODE –I: e-Payment made through Auhtorised Bank’s Internet Banking, CC/DC ....................... 8
5.1. Issues with Payment through Credit Card ................................................................................... 9
6. MODE –II: Over the Counter (OTC) Payments.................................................................................... 10
6.1. Issues with Payment through OTC .............................................................................................. 12
7. MODE -III: NEFT/RTGS from Any Bank ............................................................................................... 12
8. Challan Correction Mechanism ............................................................................................................ 14
9. Features of Accounting Process .......................................................................................................... 14
10. Proposed Accounting System .......................................................................................................... 15
11. Banking Arrangements ...................................................................................................................... 16
11.1. e-kuber ............................................................................................................................................... 16
12. Reconciliation of Receipts ................................................................................................................ 17
13. Grievance Redressal .......................................................................................................................... 17
14. Source of this Article .......................................................................................................................... 18
15. DISCLAIMER ........................................................................................................................................ 18
16. Other Articles ....................................................................................................................................... 18
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
2 | P a g e
To get regular updates please share your details on 7503031378
PROPOSED PAYMENT PROCESS UNDER GST REGIME
n modern day taxation regime, every transaction of the tax payer with the tax administration
should be transparent, responsive and simple. It has been experience of tax administrations
that more the system and procedures are made electronic more is the efficiency of tax
administration and greater is the satisfaction of taxpayer. In this context, payment system of GST
should also be based on Information Technology which can handle both the receipt and payment
processes. [Extracts from Report of Joint committee On Business Processes for GST]
1. Broad Features
Broad features of the new payment process proposed under GST Regime is:
It is noted that under GST regime, some taxes and duties may remain outside the
purview of GST and will continue to be collected in the manner prescribed under
existing accounting procedures/rules/manuals, etc. This means that two types of
Electronic payment
Single point interface for challan generation
Ease of payment
Common challan form with auto-population features
Use of single challan and single payment instrument
Common set of authorized banks
Payment through any bank
Common Accounting Codes
I
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
3 | P a g e
To get regular updates please share your details on 7503031378
challans (one for GST and other for non-GST) will be used and accounted for by the
respective Pay and Accounts Offices (PAOs)/State AGs.
The payment processes under proposed GST regime should have the following
features:
a) Electronically generated challan from GSTN Common Portal in all modes of
payment and no use of manually prepared challan;
b) Facilitation for the taxpayer by providing hassle free, anytime, anywhere mode of
payment of tax;
c) Convenience of making payment online;
d) Logical tax collection data in electronic format;
e) Faster remittance of tax revenue to the Government Account;
f) Paperless transactions;
g) Speedy Accounting and reporting;
h) Electronic reconciliation of all receipts;
i) Simplified procedure for banks;
j) Warehousing of Digital Challan.
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
4 | P a g e
To get regular updates please share your details on 7503031378
2. Tax Types & Modes of Payment
Under GST, 4 types of Taxes to be paid- CGST, IGST, Additional Tax and SGST
Every head will have 5 heads, one major Taxes and 4 minor heads like Interest
Penalty, Fees & Others. So 4 X 5 = 20 accounting heads. For example
accounting codes of CGST will look like this:
CGST
Central GST levied & collecetd by Centre.
IGST
Integrated GST levied & collected by Centre.
SGST
State GST levied & collected by States.
Additional Tax
Any additional tax if collected.
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
5 | P a g e
To get regular updates please share your details on 7503031378
Payment can be accepted by Departmental officers in enforcement cases only.
CGST
Major Taxes
Minor
Interest
Penalty
Fees
Others
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
6 | P a g e
To get regular updates please share your details on 7503031378
There are three Modes of Payment
3. Stakeholders
As discussed earlier payment process is on the most important process of GST.
Payment process will effect various stakeholders which are as follows:
Taxpayer
GSTN (Goods and Service Tax Network)
Authorized Banks
Tax Authorities of Centre & States
Accounting Authorities of Centre & States
All Banks- for NEFT/RTGS Mode of payment
one e- FPB (Electronic Focal Point Branch) for each bank (in Mode I & II) to
maintain government account and report all receipt.
Modes of Payment
Mode-IElectronic including CC/DC
Mode-IIOver The Counter Payment (for Payments upto Rs. 10k)
Mode-IIIPayment through
RTGS/NEFT
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
7 | P a g e
To get regular updates please share your details on 7503031378
all branches for receiving Over the Counter Payments
one or more front end service branch
Reserve Bank of India
o e- FPB (in Mode III)
o Aggregator for Accountal & Reconciliation of receipts
4. Basic Features
Electronically generated Challan from GSTN for all 3 modes containing a unique
14-digit Common Portal Identification Number (CPIN) for each challan.
o 4 digit ‘yymm’
o 10 digit unique CPIN
Challan once generated to be valid for 7 days.
Challan can be generated by
o Taxpayer
o His authorized representative
Departmental officers
o Any other person paying on behalf of taxpayer
Certain key details like name, address, email, GSTIN of payer to be auto-
populated.
Jurisdictional Location not to be mentioned in challan. Challan will be matched with
Master received from Tax Authorities.
Payment Period will not be mentioned in the Challan like current Service Tax
procedure.
Single challan / instrument for payment of all four types of taxes.
Time of payment: from 0000 hrs. to 2000 hrs. (Time IST)
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
8 | P a g e
To get regular updates please share your details on 7503031378
Proposed workflow of RBI’s e-Kuber model to be followed for payment, accounting
and reconciliation
Accounting Authorities to interact directly with RBI & not with Authorized banks
in case of discrepancies found during reconciliation
System of electronic Personal Ledger Account (cash ledger) on GSTN for each
taxpayer (20 pages)
One e-FPB per Authorized Bank (in Mode I & II) / RBI (in Mode –III)
GSTN to be anchor in payment process with responsibility for information flow to
various agencies
RBI to act as aggregator and anchor of flow of fund and information about receipts
5. MODE –I: E-PAYMENT MADE THROUGH AUHTORISED BANK’S
INTERNET BANKING, CC/DC
Generation of e-Challan at GSTN
Tax payer to select e-payment mode
o Net Banking
o Credit/Debit Card of any bank
o Tax Payer to choose Authorized bank in case of Net Banking
o Payment gateway of authorized bank (or their SPVs) in case of CC/DC
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
9 | P a g e
To get regular updates please share your details on 7503031378
Credit Card proposed to be used by taxpayer to be registered at GSTN - as an
additional safety check to eliminate the issue of charge back
GSTN to direct the taxpayer to the website of selected bank/payment gateway
Alongside, GSTN to forward an electronic string to the selected bank carrying
specified details of challan on real time basis
Taxpayer to make payment using the USER ID & Password provided by his bank
On successful completion of transaction, e-FPB of bank to forward a confirmation
electronic string (CIN) to GSTN on real time basis.
In case of payments through this mode a unique 17 digit number containing 14-
digit CPIN as generated by GSTN for a particular challan & unique 3 digit Bank
Code (MICR based which will be communicated by RBI to GSTN).
GSTN to credit the Taxpayer’s ledger
Copy of paid Challan to be available on GSTN for taxpayer
(downloadable/printable)
5.1. ISSUES WITH PAYMENT THROUGH CREDIT CARD
There are few issues we would like to attract attention of our readers:
a. Pre-registration of Card?
Page 10 of Report on GST Payments: The taxpayer would be required to pre-
register his credit card, from which the tax payment is intended, with the GSTN
system.
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
10 | P a g e
To get regular updates please share your details on 7503031378
Author’s view: Such pre-registration of card will slow down the process. This requirement
should be relaxed as there might be a case where CA of assesse might be making payments
on last date and registering Credit Card at that time would be time consuming as payments
made till 20.00 IST will b be reflected.
b. Delay in credit of payments from Credit Card?
Page 10 & 11 of Report on GST Payments: In respect of Credit Card payments,
presently the acquiring bank is permitted to transfer the amount to the merchant
on T+3 basis. Thus there may arise some situations where the taxpayers account
has been debited on T+0 whereas Government’s account in authorized bank
would be credited on T+3 basis.
Author’s view: Government through RBI should reduce the time by suitable negotiations
with payment gateways. Because Credit Card might be reduced as last option by assesse
when he doesn’t have sufficient money in ba-nk account and in this case credit would be
reflected after 3 days then there would be last payment interest, penalties etc. And so this
will in itself defeat the purpose of making payments through Credit Card. Or this could
also be understood that Credit Card payments should be made 4 days before last date and
thus this method reduces the payment due date which is hardship to assesse.
6. MODE –II: OVER THE COUNTER (OTC) PAYMENTS
For small taxpayers for making payment upto Rs.10,000/- per challan - by cash /
DD / cheque drawn on same bank or on another bank in the same city. No
outstation cheques are to be accepted except those which are payable at par all
branches of bank having presence at that location.
Tax payer to tender only one instrument to pay one or more type of tax.
For cheque payment, Name of authorized bank & its location to be mandatorily
filled in challan
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
11 | P a g e
To get regular updates please share your details on 7503031378
On real time basis, GSTN to share challan details with Core Banking System
(CBS) of the selected authorized Bank
Taxpayer to approach the branch of the authorized bank for payment of taxes
along with the instrument or cash
In case of cash / same bank instrument a unique transaction number (BTR/BRN)
will be generated immediately by the authorized bank’s system and given to
taxpayer
Authorized bank to send receipt information (CIN) to GSTN on real time basis
In case of instruments drawn on another bank in the same city, payment would
not be realized immediately.
Authorized Bank to inform GSTN on real time basis in two stages
when an instrument is given OTC – to send an electronic string to GSTN
containing specified details
second acknowledgement - after the cheque is realizedwith 3 additional
details
Similarly, bank to issue acknowledgement to taxpayer in two steps
Acknowledgment of cheque immediately
Upon realization of cheque, issuance of BTR / BTN
GSTN to credit the Taxpayer’s Ledger
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
12 | P a g e
To get regular updates please share your details on 7503031378
6.1. ISSUES WITH PAYMENT THROUGH OTC
There are few issues we would like to attract attention of our readers:
a. Limit of 10k for cash payments?
Only Rs. 10,000/- can be deposited over the counter in cash.
Author’s view: Current Banking Regulations allows a person to deposit upto Rs. 50,000/- in cash
without PAN Card and above than that with production of PAN Card. As this payment is to
Government for taxes either the limit should be scrapped or with production of PAN Card or at
least limit should be enhanced to Rs. 50,000/- as Rs. 10,000/- is very small amount and might not
suffice the purpose of payments of tax.
b. Limit of 10k for Cheque payments?
Only Rs. 10,000/- can be deposited over the counter in Cheque.
Author’s view: Payments through regular banking channels such as Cheques should not have any
limit. They should be limitless as there is no issue in current banking system why such limit is
prescribed for tax payments. We agree that over the period of time & considering dynamic real
time transactions recording NEFT/RTGS are more preferred method but we should not ignore old
time tested methods like Cheque Payments. Small Assesse also might not have access to Internet
Banking facilities or they might not be comfortable with Internet Banking and in this case
responsibility of payment come on shoulder of professional.
7. MODE -III: NEFT/RTGS FROM ANY BANK
To be made operational after a pilot run by RBI
For taxpayers
o not having a bank account in any of the Authorized Banks
o having a bank account in any of the Authorized Banks
No limit on amount to be paid through this mode
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
13 | P a g e
To get regular updates please share your details on 7503031378
Payments to be collected by RBI directly
RBI to perform the role of e-FPB also
Challan and NEFT/RTGS mandate form generated on GSTN NEFT/RTGS
mandate form to have validity period of CPIN printed on it
In challan, the field for name of Authorized Bank to be auto-populated as RBI
NEFT/RTGS mandate form will have certain information auto-populated
o CPIN in “Account Name” field
o ‘GST Payment’ in “Sender to Receiver Information” field
Taxpayer to print a copy of Challan and NEFT/RTGS mandate form from GSTN
& approach his bank for payment
Amount indicated for remittance to be transferred by bank to the designated
account of the government in RBI along with challan details and a Unique
Transaction Reference (UTR) Number
RBI to validate payments against each challan with UTR received from remitter
bank
RBI to report receipt of payment to GSTN (CIN) on real time basis through an
electronic string with specified details
GSTN to credit the Taxpayer’s ledger
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
14 | P a g e
To get regular updates please share your details on 7503031378
8. CHALLAN CORRECTION MECHANISM
Correction mechanism is proposed in following situations:
a. Error in GSTIN
b. Error in Major Head
c. Error in Total Amount
*It’s recommended that assesse should communicate to the tax administration to
save any further issues.
9. Features of Accounting Process
Authorized Banks to send list of CIN-wise details (electronic luggage file) for each
type of Tax (CGST, IGST, AT & SGST) per day to RBI and Accounting Authorities
at End of Day (EOD)
Error in GSTIN
No impact on transfer of Funds
Error correction mechanism not
prescribed.*
Error in Major Head
Impacts transfer of funds.
Banks required to withdraw funds from one a/c &
credit to other a/c/
Error in Total
amount
Amount paid in excess
Either claim of Refund or Carried forward to next
period.
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
15 | P a g e
To get regular updates please share your details on 7503031378
RBI through its e-kuber system to consolidate the lists received from all authorized
banks, debit their accounts and correspondingly credit Tax accounts of GOI /
respective State Governments
RBI to send digitally signed one e-scroll for each type of Tax (CGST, IGST, AT &
SGST) per day (39) to Accounting Authorities of Central Government and State
Governments & GSTN on T+1 basis
GSTN to send reconciled data (challan data from Authorized Banks and e-scroll
from RBI) to Accounting Authorities at EOD
For any discrepancy noticed, accounting authority to generate a Memorandum of
Error (MOE) & send to RBI
RBI to resolve the discrepancy in consultation with the Authorized Bank
RBI to report the corrected data to respective Accounting Authority & GSTN
Taxpayers Master data to be provided by Tax Authorities to Accounting Authorities
for mapping of payment details jurisdiction wise
10. Proposed Accounting System
Four different Major Heads of accounts to be opened for each tax along with
underlying Minor Heads to account for various taxes & other receipts like interest,
penalty, fees & others
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
16 | P a g e
To get regular updates please share your details on 7503031378
Standardized uniform Accounting Codes for all taxes under GST regime among
Centre, State & UTs to facilitate settlement of IGST on the basis of centralized
reporting
Common Accounting Codes for Centre & States.
GSTN will receive 39 e-scrolls from RBI (one each for CGST, IGST and Additional
Tax and one each for SGST for each State/UG).
11. Banking Arrangements
Common set of Authorized Banks comprising existing authorized banks of the
Central Government & all State Governments/UTs (presently 26)
Certain minimum standards to be met by banks to become authorized banks
A system of penalty/incentive proposed for reporting of error free data
Payments through non-authorized banks permitted (NEFT/RTGS)
11.1. E-KUBER
e-Kuber is “Core Banking System” (CBS) of RBI. RBI will consolidate luggage files received from all authorized banks, debit their accounts and correspondingly credit the CGST, IGST and Additional Tax accounts of Government of India and SGST accounts of each State/UT Government maintained in RBI(39 accounts). RBI would send consolidated, digitally signed e-scrolls, along with all the challan details, for each type of Tax (one each for CGST, IGST and Additional Tax for Government of India, and separate e-scrolls of SGST for each State/UT Governments) per day (including NIL payment day) after including the amount collected by it in Mode – III to Accounting Authority of Centre (e-PAO) / each State (e-Treasury) and GSTN simultaneously.
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
17 | P a g e
To get regular updates please share your details on 7503031378
If any discrepancy is reported by Accounting Authority or GSTN, it would carry out the correction mechanism with the authorized bank and thereafter report the corrected data to respective Accounting Authority and GSTN. RBI will consolidate Datewise Monthly Statements (DMS) received from the banks for each tax and government, validate the consolidated statements (39) with reference to its own data of e-scrolls reported during the report month, have a systemic review of unresolved discrepancies and communicate the statements to the respective accounting authorities within 3 days from end of the report month.
12. Reconciliation of Receipts
Use of only system generated challans – no re-digitization by any actor in the entire
work flow
CPIN to be generated by GSTN -- to be used as a key identifier up till receipt of
payment by Bank
CIN (actual indicator of receipt of payment) to be generated by collecting Bank --
to be used as a key identifier thereafter for accounting, reconciliation, etc.
Accounting Authorities to play a paramount role in reconciliation –
Accounting on the basis of RBI data
Reconciliation on the basis of GSTN and bank data
13. Grievance Redressal
In OTC mode if cash ledger of taxpayer not credited within three days- approach
bank where instrument presented
In RTGS/NEFT mode if cash ledger of taxpayer not credited within three days-
approach bank where taxpayer’s account is
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
18 | P a g e
To get regular updates please share your details on 7503031378
Each e-FPB required to have front end service branch to resolve payment related
issues
14. Source of this Article
Report of the Joint Committee on Business Process for GST on GST Payment
Process (April’15)
PPT on Proposed Payment Process (Oct’15)
Model Law GST
15. DISCLAIMER
This document is for information only. All care has been taken for laws but in
case something has been missed request our readers to update us. This
should not be taken as any advice from our concern. We shall not be liable
for any loss if occurred for laws stated in this document.
16. Other Articles
Opportunities for Professionals under GST Regime
http://gstpanacea.com/services/opportunities-professionals-gst-regime/
Registration Process under GST Regime
http://gstpanacea.com/services/registration-process-goods-service-tax-gst-regime/
Returns proposed under GST Regime
Proposed Payment Process under GST – Compiled by www.GSTpanacea.com
19 | P a g e
To get regular updates please share your details on 7503031378
http://gstpanacea.com/services/returns-proposed-goods-service-tax-gst-laws/
Model Law GST - Law & Practice (Part-1)
http://gstpanacea.com/services/model-law-gst-law-practice-part-1/
Thanks & Regards Team GSTpanacea.com 7503031378