A taxpayer can create challan under GST from GSTN portal for the purpose of payment of taxes. The payment particulars have to be fed in by the taxpayer or his/her authorized person as the case maybe. It is possible to fill in the challan form partially and temporarily “save” the challan for completion at a later stage. A saved challan can be “edited” before finalization.
After the taxpayer has finalized the challan, it will be generated. The remitter will have the option of downloading the challan for printing on later stages or printing the challan online for his record.
It is important, that once a challan is generated online, it cannot be modified further and will be frozen. However, a tax payer can save the challan midway for future editing. Once the challan is finalized and CPIN generated, no further changes can be made to it by the taxpayer.
Is there a validity period of created challan under GST?
Yes, created challan will be valid for 15 days after the generation and thereafter it will be purged from the System. However, the taxpayer can generate another challan at his convenience.
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 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.
Details of the Challan for GST tax payments
The Challan will reflect only the net tax paid amount along with the related bifurcations of nature of tax liability, such as interest, penalty, fees & other charges etc. Presently, Tax payments challan information forms the basis of accounting and reconciliation between the bank, RBI, Tax Authority & the accounting authorities of the centre, state & the UT’s.
GST tax accounting code for CGST,SGST,IGST & Additional Tax
CGST, IGST & Additional tax components will be accounted for under Consolidated Fund of India(CFI).Transfer of due IGST & additional tax to the states can thereafter be made thereafter made therefrom as per existing procedure. The interest, penalty, fees or other charges if any under GST will need to be accounted for separately. Hence they would be reflected under separate heads in the Tax Payment Challan.
Main features of GST payment process
Electronically generated challan from GSTIN common portal in all modes of payments & no use of manually prepared challan.
Facilitation of the taxpayer by providing hassle free anytime, anywhere mode of payment of tax.
Convenience of making payment online
Logical Tax collection data in electronic format.
Faster remittance of tax revenue to the government account.
Speedy accounting and recording
Electronic reconciliation of all the receipts.
Simplified procedure for the bank.
Warehousing of digital challan
OVER THE COUNTER PAYMENT THROUGH AUTHORIZED BANKS:
- Another mode of payment that will be employed in the proposed GST regime will be Over the Counter (OTC) payments which will enable the taxpayers to make payment of the taxes at the Authorized Bank’s counter. This will be beneficial for smaller taxpayers that do not have access to internet banking facilities. CCA raised an issue that the authorized banks might be asked as to whether they would be able to scroll these OTC payments through e-FPBs. This was discussed and RBI’s representative assured that the scrolling by e-FPBs of OTC payments in one scroll would be ensured. The authorized banks will be required to establish / upgrade their IT software for accepting GST receipts.
- The following stakeholders will play a key role in establishing an effective OTC payment system in the proposed GST scenario:
- Branches of Authorized Banks;
- e-FPBs of Authorized banks;
- e-Kuber of RBI;
- e- PAOs of Centre / e-Treasuries of State Governments;
- CCA, CBEC / Accountant General of the States;
- Tax authorities of Centre and States.
Process involved in Over the Counter payment of GST through authorized banks:
- Every tax payer who wants to avail the facility of OTC payment (only for paying tax upto Rs. 10,000/- per challan), will access GSTN for generation of a challan through which payment is to be made.
- Upon creation of the draft challan, the taxpayer will fill in the details of the taxes that are to be paid. From the available payment options, the taxpayer would select option of cheque, DD or cash based payment. The name of the authorized bank and its location (city/town/village) where the instrument/cash is to be presented is required to be filled in necessarily. No outstation cheques are to be accepted except those which are payable at par at all branches of bank having presence at that location. In case cheque or DD is selected as the mode of payment, entry of Instrument details is recommended, but not mandatory, as the taxpayer may not have the instrument ready at the time of challan generation. The tax payers can partially fill in the challan form and temporarily “save” the challan for completion at a later stage. A saved challan can be “edited” before finalization. After the tax payer has finalized the challan, he will generate the challan, for use of payment of taxes. The challan so generated will have a Unique Common Portal Identification Number (CPIN), assigned only when the challan is finally generated, that will help the portal and other authorities in identifying the challan. After the challan is generated, it will be frozen and will not be allowed to be modified. The CPIN / challan so generated would be valid for a period of seven days within which payment is to be tendered. GSTN will inform the challan details including validity period to the CBS (Core Banking System) of the selected bank on a real time basis.
- Upon successful saving of the challan details, the challan will be available on the dashboard of the taxpayer in downloadable/printable form. So the taxpayer can either download the challan form and print it offline or can print the challan directly from GSTN. If the payment is made by cheque or DD, the challan itself would have a disclaimer that the payment is subject to realization of cheque or DD.
- Thereafter taxpayer will approach the branch of the authorized bank for payment of taxes along with the instrument or cash. Since the tax payer is required to pay four types of taxes and the amount is required to be credited in the accounts maintained by bank for each type of tax, one option for the tax payer is to submit four instruments for crediting to the respective accounts. Four instruments may not be required if pooled account for realization of instrument is maintained. The matter was discussed in detail and it was recommended, that in the interest of facilitating the payment, each e-FPB should maintain a GST pool account so that the tax payer can issue only one instrument which will be written in the name of the GST pool account of the concerned bank. The bank’s IT system upon realization of the instrument, will immediately first credit that amount to the GST pool account and then immediately transfer that amount to the respective tax accounts [CGST, IGST, Additional Tax or SGST(39 accounts) as per details in challan (CPIN Data)]. However RBI representatives observed that since there would be real-time sharing of data between GSTN and Agency Banks, the details would be available to the bank official before submission of the challan by the customer. In such a situation, GSTN would have already shared the break-up of the total amount to the bank and the bank needs to credit the same in the appropriate head. The internal Accounting mechanism of bank may be left to the bank to design, as the requirement here is the proper booking and reporting of the transaction which banks would have to ensure. It was decided that those banks need not operate a GST pool account which can credit the amount in the respective tax accounts
‘on the fly’.
- There should be a linkage between the GSTN and the Core Banking System (CBS) of the authorized banks whereby the details of challan are shared with the Authorized bank selected by the tax payer on real time basis so that they can be stored in the database of banks and also to facilitate the cashier / Teller to verify the details of the challan submitted by the remitter. This will eliminate the need for manual feeding of the challan details by the cashier / Teller in the banking system and thereby reduce the errors in data processing.
- The taxpayer should preferably carry two copies of the challan, one for the bank’s record and another for himself to get acknowledgement. In the alternative, he can use a normal pay-in-slip and mention CPIN and challan amount in it. On approaching the bank, he should provide the challan itself or at least CPIN number on normal pay-in-slip to enable the cashier / teller to fetch the challan details in his system. There should be a customized IT application (software) in the bank’s system to accept GST receipts on OTC basis. While each branch can accept GST receipts, the credits should always be to the GST accounts maintained and operated by e-FPB . The banks not having such system should not be allowed to accept OTC payments. The minimum requirements to be met by the banks for being authorized to accept GST receipts for all modes including OTC mode are detailed in para 85 below.
- The cashier / teller will verify the details of challan, payment instrument and amount provided by the taxpayer with those displayed in his system and should accept the receipt only when no discrepancy is found. If the challan has crossed its validity period of seven days, the bank’s system itself should bar acceptance of the payment. In any case, the challan would also not be available in the GSTN and consequently in the bank’s system because it would have been purged from the System by GSTN upon the expiry of the 7 day validity period.
- The tax payer may make payment by cash or instruments drawn on the same bank or on some other bank in the same city. In case of cash payments or same bank instruments, the payment would be realized immediately and a transaction number (BTR/BRN) and CIN will be generated immediately at the authorized bank’s system which will be unique for each and every transaction. Such successful transactions shall be intimated to GSTN on real-time basis with details similar to those mentioned in para 21 above. This message will convey to the common portal that the payment has been successfully received at the bank’s counter.
- After generation of BRN, the bank cashier may give a printed receipt from his system including the Bank’s transaction number (BTR/BRN) and CIN. However, if it not found feasible to print a separate receipt, the cashier should record the BRN and CIN generated from the system, on the tax payer’s copy of the challan or pay-in-slip as acknowledgment.
- In case an instrument drawn on another bank in the same city is presented, the payment would not be realized immediately. In such case, CIN will not be generated immediately, and cashier should write only the system generated acknowledgment number on the challan / pay-in-slip and a stamp to the effect that the acknowledgment by the bank is subject to realization of the cheque / DD. The tax-payer need not visit the bank again to get CIN as the same will be communicated to him from GSTN as per the process detailed in para 47 & 48 below. However, if he does not receive any communication from GSTN within 3 days, he should visit the bank to ascertain the status of his payment.
- Where the instrument is drawn on another bank, there should be a validation in the bank’s system to prevent out station cheques (except those payable at par across cities), and to also prevent deduction of commission charges for instruments drawn on another bank in the same city.
- The Authorized Bank would send the instrument for collection and the transaction would be treated as complete and successful only after the actual receipt of the amount by the said bank.
- The bank will inform GSTN on real time basis in two stages. First when an instrument is given OTC. At this stage the Authorized bank will forward an electronic string to GSTN which will contain the following details:
- Challan Amount;
- Bank’s acknowledgement number.
On receipt of the above first message, GSTN should send a SMS to the tax payer, in addition to showing the status of the payment on its portal as subject to realization.
- The bank’s system would send a second message to GSTN once the cheque is realized, the total amount is credited first to GST pool account and thereafter the funds are credited to the respective tax accounts as per CPIN data (as stated in para 34 above, GST pool accounts are not required to be maintained by those banks who can credit the amount in the respective tax accounts ‘on the fly’). On the day of realization, it will become a successful transaction to be reported to RBI on T+1 (T = 0 being day of realization). After the successful completion of transaction, the second acknowledgement will have the same details as mentioned in para 46 above with three additional details:
- Date of Realization of Cheque;
- Time of realization of cheque;
- Bank Transaction Number (BRN/BTN).
On receipt of the second message, GSTN would send a SMS to the tax payer, in addition to updating the status of the payment on its portal.
- This 2 stage intimation by authorized banks is recommended for the following reasons:
- Keep a watch on delays on the part of authorized banks in realization;
- Maintaining a system based control as all branches of authorized banks will be allowed for OTC.
- On receipt of the real time information for a successful transaction as per para
41 above (cash, cheque on same bank or DD) or receipt of the second message from Bank as per para 47 above (cheque drawn on another bank), the tax paid challan will be credited to the tax ledger account of the taxpayer. If the OTC payment was subject to realization (para 46), the initial status on the dashboard will state so. If the cheque is dishonoured, the presenting bank should inform GSTN about the fact of dishonour and same will be informed by GSTN to taxpayer and reflected on his dashboard.
Role to be played by each stakeholder:
- The role played by each stakeholder in this mode of payment will be the same as mentioned in Mode I. There is an additional stakeholder in this mode, namely Branch of Authorized bank that receives the remittances and its role is discussed below.
Branch of Authorized bank:
- Being the first point of contact for the remittance by the taxpayer, the branch of the Authorized bank receiving the payment will play a key role in the accounting and reconciliation of data with GSTN. It will perform the following functions:
- Accept the payment only through the customized GST software/screen in its system.
- Provide an acknowledgement to the tax payer;
- Send the instrument (if pertaining to another bank) to the clearing house for realization and record the result in the IT system as and when the response is received. Such recording should be system based rather than manual and include realization or dishonouring of the cheque, as the case may be, so that the IT software can take up further action including intimation to GSTN on real time basis;
- Credit the realized amount into either GST pool account, if so, maintained by the authorized bank (in its e-FPB) and thereafter transfer the said amount into the individual tax head accounts as indicated in the challan (all Authorized banks must develop a suitable GST software for this purpose) or to credit the amount directly to the respective government’s account (39 accounts).
- In case the instrument is dishonoured, the presenting bank should inform GSTN.
- It is to be noted that banks will have to develop a mechanism/IT application where all these amounts tendered at individual branches of an authorized bank are only handled through the e-FPB of that authorized bank. This is because the tax accounts will be maintained only by the e-FPB. Individual branches have not been authorized by RBI to operate Government account. It is also important to provide for a mechanism in GST Law to debar those tax payers whose cheques have once bounced from using this mode of payment. The most effective mechanism will be through GSTN which should debar such defaulters from using this mode.
A. FAQs on Cancellation of Over the Counter (OTC) Challan
Q.1. Can I cancel a OTC Challan?
Ans. Yes, you can cancel a OTC Challan which is not paid from the Challan History. Navigate to Services > Payments > Challan History to cancel such OTC Challan.
Q.2. Can I do payment for a Cancelled Challan?
Ans. No. Once a Challan is cancelled, payment cannot be initiated for it.
B. Manual on Cancellation of Over the Counter (OTC) Challan
How can I cancel the OTC Challan after logging to the GST Portal?
To cancel the OTC Challan after logging to the GST Portal, perform the following steps:
1. Access the https://www.gst.gov.in/ URL. The GST Home page is displayed.
2. Login to the GST Portal with valid credentials.
3. Click the Services > Payments > Challan History command.
4. Select the date range in the From and To date fields using the calendar. Or, Select the Search by CPIN in case you want to cancel the OTC challan through the CPIN.
5. Click the Cancel Button.
6. You need to ensure that no payment is made against the OTC Challan. Click the PROCEED button.
Notice that the Status of the OTC Challan is changed to Cancelled.