GST Payments and Refunds: Rates and Due Dates

gst refunds

Once the GSTR 1 and GSTR 2 are filed, a trader is required to file GSTR 3 and then make GST payments. If a refund needs to be claimed, the same can be done by filing the relevant refund-related forms. In the article below, we will discuss the following in detail:

GST Payments

1. What payments are to be made under GST?

GST largely divided into 3:

IGST: This is to be paid when interstate supply is made (paid to centre).
CGST: This is to be paid when making supply within the state (paid to centre).
SGST: This is to be paid when making supply within the state (paid to state).

Apart from the above mentioned payments a dealer is required to make these payments:

Tax Deducted at Source (TDS): TDS is a tool by which the tax is deducted by the dealer before making the payment to the supplier.

For example, let’s say an agency awards a contract for Rs. 1 crore. When the government agency makes payment to the contractor, TDS will be deducted at 1% and the balance amount will be paid.

Tax Collected at Source (TCS): TCS is essentially for e-commerce aggregators. This means that any dealer selling through e-commerce will receive payment after deduction of TCS at 2%. This provision is presently relaxed and will not be applicable till notified by the government.

Reverse Charge: The liability of payment of tax shifts from supplier of goods and services to the receiver.

Interest, Penalty, Fees and other payments

2. How to calculate the GST payment to be made?
Typically, the Input Tax Credit (ITC) must be reduced from the Outward Tax Liability to calculate the total GST payment to be made.
The TCS/TDS will be reduced from the total GST to get the net payable figure. The interest & late fees (if any) will be added to arrive at the final amount.

Likewise, the ITC cannot be claimed on the interest and late fees. Both the interest and late fees are required to be paid in cash.
The way the calculation is to be done is different for different types of dealers:

Regular Dealer
A regular dealer is liable to pay the GST on the outward supplies made and can also claim the ITC on the purchases made by him. The GST payable by a regular dealer is the difference between outward tax liability and ITC.

Composition Dealer
The GST payment for a composition dealer is somewhat simpler. A dealer who opts for the composition scheme has to pay a fixed percentage of the GST on the total outward supplies made. The GST is to be paid based on the type of business of a composition dealer.

3. Who must make the payment?
These dealers are required to make the GST payment:
A registered dealer is required to make the GST payment if the GST liability exists. The registered dealer required to pay the tax under reverse charge mechanism. An e-commerce operator is required to collect and pay the TCS. The dealers are required to deduct TDS

4. When must the GST payment be made?
The GST payment is to be made when the GSTR 3 is filed i.e. by 20th of the next month.

6. How to make the GST payment?

GST payment can be made in 2 ways:
Payment through Credit Ledger: The credit of an ITC can be taken by the dealers for the GST payment. The credit can be taken only for payment of the tax. The interest, penalty and the late fees cannot be paid by utilising ITC.

Payment through Cash Ledger: The GST payment can be made either online or offline. The challan has to be generated on the GST Portal for both online and offline GST payment. Where tax liability is more than Rs 10,000, it is compulsory to pay the taxes online.

7. What is the penalty for the non-payment or delayed payment?
If the GST is unpaid or paid late interest at a rate of 18% is required to be paid by the dealer. Likewise, a penalty to be paid. The penalty is higher of Rs. 10,000 or 10% of the tax short paid or unpaid.


1. What is a GST refund?
Generally, when GST paid is more than GST liability a situation of claiming the GST refund arises. Under GST the procedure of claiming a refund is standardized to avoid any confusion. The procedure is online and time limits have also been set for the same.

2. When can a refund be claimed?
There are numerous cases where a refund can be claimed. Here are some of them:
a. An excess payment of tax is made due to a mistake or an omission.
b. Dealer Exports (this includes deemed export) goods/services under claim of a rebate or a Refund
c. ITC accumulation due to the output being tax exempt or nil-rated.
d. The refund of tax paid on purchases made by Embassies or UN bodies.
e. The tax refund for international tourists.
f. Finalization of a provisional assessment.

3. How is a GST refund calculated?
Let’s take a simple case of excess tax payment made. Let us assume that Mr. ABC’s GST liability for the month of November is Rs. 50,000. But due to a mistake, Mr. ABC made a GST payment of Rs 5 lakh. Now Mr. ABC has made an excess GST payment of Rs 4.5 lakh which can be claimed as a refund by him. The time limit for claiming the refund is 2 years from the date of payment.

4. What is the time limit for claiming a refund?
The time limit for claiming a refund is 2 years from a relevant date.

5. How can one claim a GST refund?
The refund application has to be made in Form RFD 01 within 2 years from relevant date. The form should also be certified by a Chartered Accountant.

A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.