Payment Option for Small Tax Payer under GST

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In order to facilitate the small tax payers, who do not have access to internet banking facilities, the option of Over the Counter (OTC) payment has also been proposed under the GST regime. However, a limit of maximum tax payment of Rupees 10,000 has been fixed on the challan. This has been done to limit the cash, cheque or DD based transactions in the system.

The authorised banks would be required to upgrade their IT software in order to accept the OTC payments under GST. In the discussions on the subject, it was assured by RBI that the scrolling of OTC payments would be done by the e-FPBs along with the online tax payment scroll. The stake holders in this payment process are the same as in the online tax payment system.

Even for the OTC payment the taxpayer will have to access the GSTN online for generation of the challan through which the payment is to be made. Besides the details of the taxes to be paid, the taxpayer will also fill the details of the authorized bank branch where he will make the payment. In case the DD or cheque number is not available he can save the partially filled challan and refill the details at a later stage. Outstation cheques are not likely to be accepted.

Once all the details are filled in the challan, the taxpayer will generate the challan for payment of taxes. No modification is possible after the challan has been generated and it will remain valid for seven days. The challan will have the unique Common Portal Identification Number (CPIN). The taxpayer can take the printout in duplicate and deposit it at the (filled in) authorized bank branch along with the cash, DD or cheque. The duplicate copy of the challan will be returned with a receiving stamp, Branch reference number (BRN) and CIN to the taxpayer.

For facilitating the GST payment the authorized bank will accept a single instrument from the tax payer under the OTC payment option. They will deposit the amount in the GST pool account specially created for this type of payment. The amount will be credited on the realization of the instrument. The bank would be immediately required to transfer the amount to the respective accounts – CGST, IGST, Additional tax, or SGST as per the details filled in the challan by the tax payer. Since the challan is already shared on the GST Network, the information will be available on real time sharing basis to the concerned stake holders.  The crediting to the various GST accounts will only be a completion of the accounting procedures.

A network linkage between the GSTN and Core banking system (CBS) is proposed, so that the details of the challan are available to the cashier of the authorized bank when he receives the challan from the taxpayer. This will eliminate the repetitive work and also reduce the errors in the system. Also, the cashier will be able to reject the outstation cheques and the complete tax challan if it has exceeded the validity of seven days.

It is also being recommended that the GST Network would debar those tax payers from using OTC whose cheques bounce during the realization process.

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