[FAQs] on Payment and Refunds under GST

  • Blog|GST & Customs|
  • 5 Min Read
  • By Taxmann
  • |
  • Last Updated on 14 July, 2023

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.

Taxmann.com | Research | GST

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.

Taxmann.com | Practice | GST

2. TDS & TCS

FAQ 1. What is the rate of tax for collection of tax at source applicable to electronic commerce operator under CGST Act, under SGST Act and under IGST Act, 2017? When and on what value the rate of tax for collection at source will be applicable?

Tax Collected at Source (TCS) under GST law

Under Section 52 of the CGST Act, 2017, every electronic commerce operator, not being an agent, shall collect an amount calculated at such rate not exceeding one per cent, as may be notified by the Government on the recommendations of the Council.

However, on the recommendations of the Council, the Government has issued notifications whereby it has fixed rate of TCS @ 0.5% under CGST Act and 0.5% under SGST Act, in case of intra-state supplies, and @1% under IGST Act, in case of inter-state supplies.

TCS would be calculated on the net value of taxable supplies made through the electronic commerce where the consideration with respect to such supplies is to be collected by the electronic commerce operator.

The net value of taxable supplies is the aggregate value of taxable supplies of goods or services or both made during any month by all registered taxable persons through the operator as reduced by the aggregate value of taxable supplies returned to the suppliers during the said month.

It has also been clarified that net value for the purpose of Section 52 shall not include TCS collected under the Income Tax Act.

TCS shall be collected by the Operator while paying to the supplier the price of the product/services.

3. Refund of GST

FAQ 2. What is the refund of tax under section 54 of CGST Act? What are the provisions relating to refund of balance of electronic cash ledger as per the GST law?

Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application electronically in prescribed form before the expiry of 2 years from the relevant date.

A registered person, claiming refund of any balance in the electronic cash ledger in accordance with provisions of section 49(6), may claim refund in the return furnished under section 39, in such manner as may be prescribed.

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

3 thoughts on “[FAQs] on Payment and Refunds under GST”

  1. how to apply gst refund with payment of tax.
    what are the documents required for filing refund.
    we have already applied previous year without tax. for the period of apr22 to june 22, july22 to march23 applied as a nill refund. now we have to file withpayment of tax what is the procedure.

    1. Refer Section 54(4) of the CGST Act and Rule 89(2) of the CGST Rules read with CBIC Circular No. 125/44/2019-GST dated November 18, 2019

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