GST Payments and Refunds

GST Payments and Refunds

Deskera Content Team
Deskera Content Team
Table of Contents
Table of Contents

A GSTR 3B needs to be filed every month once GSTR 1 is filed for reporting Sales and ITC, along with the necessary GST payment. Furthermore, if a refund is required to be claimed, the same can be done by filing the appropriate forms.

This article aims at presenting information about the GST payments and refunds, along with the related aspects such as:

  • Latest Information Related to GST Refund

All About GST Payment

  • Payments to be made under GST
  • Calculating the GST payment
  • When to make the payment?
  • Who should make the payment?
  • How to make GST payment?
  • What are Electronic Ledgers?
  • Penalty for Non-payment or Delayed payment

All About GST Refund

  • What is a GST Refund?
  • When can you claim the refund?
  • Time Limit for Claiming the refund
  • How to claim the GST refund?

1st May 2021

Any refund claims that fall between 15th April 2021 and 30th May 2021 will have the time limit extended. The extended deadline shall be the later of two dates:

  1. 15 days after reply to notice OR

  2. 31st May 2021

27th June 2021

By means of a notice, the authority may have rejected a full or part of the amount applied for a refund. Within 60 days of receipt of the refund application, the final decision will be made following the completion of the due process.

The last date to issue an order shall be extended to the later of the following dates in case this time limit expires between 20th March and 30th August 2020:

  1. Within 15 days of receiving the applicant's reply to the notice

  2. 31st August 2020

3rd April 2020

The deadline for completion or compliance has been extended to 30th June 2020, where the window of time falls between 20th March 2020 and 29th June 2020. This includes cases where the deadline to apply for a GST refund under RFD-01 expires between March 20th and June 29th, 2020.

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Payments to be made under GST

According to GST, the tax to be paid is divided into 3 parts:


IGST is Integrated Goods and Services Tax and this is to be paid when an interstate supply is made. It is to be paid to the Central government.


CGST is the Central Goods and Services Tac and it is to be paid when the supply takes place within the state. This, too, has to be paid to the central government.


SGST is the State Goods and Services Tax and it is to be paid when the supply is within the state. This tax has to be paid to the State Government.

Besides the above-mentioned payments, there are other payments under GST which are:

TDS: Tax Deducted at Source is a procedure in which the tax is dedicated by the dealer/trader before completing the payment to the supplier.

TCS: The meaning of Tax Collected at Source is that an E-commerce dealer will receive his payment after the deduction of TCS @2%.

Reverse Charge: The reverse charge mechanism refers to a deal or trade between a registered purchaser and an unregistered seller/supplier. In this mechanism, the GST is paid by the registered purchases to the government on behalf of the seller. The seller only receives the value of the goods sold.

Calculating the GST Payment

Often, the GST is calculated by reducing the ITC from the outward tax liability. The TCS or the TDS will be deducted from the GST amount to get the final amount. Additionally, there may be late fees added, if applicable.

It must be noted that Interest and late fees are also not eligible for ITC, and should be paid in cash. Depending on the type of dealer, the calculation will differ:

Regular Dealer: In addition to paying GST on outward supplies, a regular dealer can also claim Input Tax Credit (ITC) on purchases. Regular dealers must pay GST based on the difference between their outward tax liability and the input tax credit.

Composition Dealer: Choosing to participate in composition scheme Outward supplies are taxed at a set percentage. Depending on the type of business that a composition dealer conducts, GST must be paid.

Applicable GST Rate-Composition Scheme

Business Type




Manufacturer and Trader of Goods




Restaurants not Serving Alcohol




The table shows the Composition Scheme. This scheme, however, is not available for the Service Providers.

When to Make the Payment?

The GST payment is due by the 20th of the following month when the GSTR 3 is filed.

Who Should Make the Payment?

Payments are to be made by:

  1. The Registered dealer must pay GST if there is a GST liability.
  2. Dealers are required to deduct TDS
  3. E-commerce operators are responsible for collecting and paying TCS
  4. A registered dealer must pay tax under the Reverse Charge Mechanism (RCM).

How to Make the GST payment?

There are two ways to pay GST: Payment through Cash Ledger and Payment through Credit Ledger.

Payment through Cash Ledger

Online and offline GST payments are both possible. In order to pay for GST using any of the methods, the challan must be generated via the GST Portal. In cases where tax liability exceeds 10,000 rupees, online tax payment is mandatory.

Payments through the Credit  Ledger

Dealers can claim ITC for the GST payment. They can use the credit only for taxes and not pay interest, penalties, or late fees.

What are Electronic Ledgers?

Electronic Ledgers maintained by the GST system are of the following three types:

Cash Ledger: This is a ledger or an account of the taxpayer that is maintained by the GST system to reflect the deposits made in cash. This cash is deposited in the recognized banks. The cash ledger showcases the taxpayers’ deposits and payments.

Credit Ledger: The self-assessed ITC in the monthly returns is reflected in the credit ledger. As this ledger is used only for the payment of tax, it cannot be used for any other payments such as penalties, fees, interests, and so on.

Liability Ledger: This ledger gets auto-displayed on the dashboard of the taxpayer and displays information about the total tax liability for a particular month after netting for the taxpayer.

Penalty for Non-Payment or Delayed Payment

Dealers who fail to pay GST are liable for interest at a rate of 18% if GST is not paid or is paid late along with a penalty. The Tax short-paid or unpaid are penalized with Rs. 10,000 or 10%.

What is a GST Refund?

GST refunds are usually available when the GST paid exceeds the GST liability. Therefore, to avoid confusion, the GST refund process has been standardized. One has to complete the process online within the timeframe allotted to complete it.

When Can You Claim the Refund?

It is possible to claim a refund in a variety of cases. There could be a variety of reasons such as an excess payment. An overpayment of taxes could be the result of an error or omission.

  • Trade-related exports (including deemed exports) for which a rebate or refund is due
  • after final assessment
  • When Embassies or the UN bodies make a purchase, it becomes a scenario for the refund of the tax paid.
  • ITC accumulation resulting from tax-exempt or nil-rated output
  • Return of tax refunds to international tourists

Time Limit for Claiming the refund

A taxpayer can claim the refund two years from the relevant date. The government has assigned relevant dates depending on the case. These dates may vary according to individual cases. Also, if there is a delay from the Government’s end to refund the claim then the government pays an interest of 24% per annum.

Let’s look at the table for more information:

Reason for the Claim

Relevant Date

Accumulation of ITCs if the output is tax-exempt or nil-rated

Financial year's last date where the credit belongs

exportation or presumed exportation

when the goods are shipped, loaded, or passed through the border

Overpayment of GST

Date of payment

Finalization of provisional assessment

Date of adjustment of tax

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How to Claim the GST refund?

You must submit Form RFD 01 within 2 years from the relevant date to request a refund. The taxpayer needs to get the form certified by a Chartered Accountant.

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Key Takeaways

Let’s quickly look back at the highlights of the article:

  • Payments under GST are divided into various parts that include the IGST, CGST, SGST, Reverse Charge, TDS, TCS, and so on.
  • Calculation of the GST depends on whether the trader is a regular dealer or a composition dealer; based on this, the GST rates are applied.
  • GST Payments can be made either through the Cash Ledger or the Credit Ledger.
  • We have also seen the three kinds of electronic ledgers: Cash Ledger, Credit Ledger, and the Liability Ledger.
  • Dealers who fail to pay GST are liable for interest at a rate of 18% if GST is not paid or is paid late along with a penalty.
  • We have learned that just like the various GST forms for filing the returns, the taxpayers also need to file a claim to the refund.
  • The refund is the amount that they seek to get back from the government. GST refunds are usually available when the GST paid exceeds the GST liability.
  • You must submit Form RFD 01 within 2 years from the relevant date to request a refund.
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