What Happens When You Don’t Make GST Payments!

The non-filers of GST returns stood at approximately 20% in december 2019. Businesses with less returns than Rs.1.5 crore annually, have to file their returns quarterly, while companies with higher revenue than Rs.1.5 crore have to submit GSTR-1 forms monthly. Due date of filing for such returns are not uniform and thus changes every month. information regarding the due dates are available on the official website of GST council.

What happens if you fail within the due date?

Delays in GST payments lead to panelaties. GST levied on a manufactured product can be of three types, you probably have heard about these:

  • Central goods and Services Tax – CGST,
  • State Goods and Services Tax – SGST,
  • Supply and Integrated Goods and Services Tax – IGST.

CGST and SGST are imposed on intra-state and IGST are paid for inter-state supplies.

Fines – when you say no to gst payments:

  • For delay in such GST return filing, a late fee of Rs.100 per day is imposed under CGST and SGST, respectively.
  • For IGST, late fines rise upto Rs.200 per day.

The maximum amount collected as late fees is restricted to Rs.5,000 by the central government, even if the total fine is higher.

Here are Fines of non-payment for nil return filers:

  • For CGST and SGST, the fine accumulation is Rs.50 per day.
  • For IGST, the fine payable is Rs.100 per day

You can make all due GST payments to avoid any penalties. Filing GST online gives you several advantages for instance lower input tax credits. This increases the average Sales and Revenue of a Company.

The Requirements in GST payments

If a business wants to enjoy the GST benefits like increased overall revenue due to the elimination of cascading effects, gst payments should be made timely without any delay.

As per the GST information issued by CBIC, a business has to make GST payments before the due date every month and simultaneously file its return.

Timely GST payments also enables companies to avail loans for improved efficiency. These loans with attractive features are available for easy repayments.

Rules for GST payment:

As per the GST payment rules, Without furnishing the return and paying the taxes due for a month, the subsequent month’s return cannot be furnished. Also, if the tax due is not paid, interest will be applied on the same, starting from the GST payment due date on which the tax was supposed to be paid.

Calculations for GST payment:

  • Determine the total output GST
  • Determine the eligible ITC
  • Set-off the output GST with the ITC.

Methods of GST payments:

  1. Online GST payments:
  2. Offline GST payments:

A quick overview is here to pay GST online.

Take a look on offline payments:

  1. Cheque, DD, cash, NEFT or RTGS, which can be chosen voluntarily.
  2. Alternatively, one of these modes is chosen when a taxpayer’s bank is not reflected in the card payment list.
  3. Taxpayers can pay after generating GST challan, before or after logging in to the GST portal.
  4. Take a print out, fill in depositor details, sign and submit it to the bank to complete the payment process.
  5. In the case of OTC, banks will process the instrument in not more than two days. Thereafter, the electronic cash ledger gets updated with the amounts.
  6. The maximum Payment that taxpayers pay through the OTC is Rs 10,000. If the amount exceeds this limit, the taxpayer must look for other modes.

If the taxpayer chooses RTGS/NEFT while generating challan, steps vary. He must take a print out of challan, fill and sign.

Submit along with the challan to the bank. The bank processes this and provides the UTR number generally in a few hours.

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