PROPOSED PAYMENT PROCESS

PRESENTATION PLAN

•   Broad Features
•   Tax Types & Modes of Payment
•   Stakeholders
•   Basic Features
•   Workflow for Payment under various Modes
•   Features of Accounting Process
•   Proposed Accounting system
•   Banking arrangements
•   Reconciliation of receipts
•   Redressal of grievances

BROAD FEATURES

• Electronic payment process- no generation of paper at any stage
• Single point interface for challan generation- GSTN
• Ease  of  payment three  modes  including  CC/DC  & NEFT/RTGS
• Common challan form with auto-population features
• Use of single challan and single payment instrument
• Common set of authorized banks
• Payment through any bank
• Common Accounting Codes

TAX TYPES & MODES OF PAYMENT

• Under GST, 4 types of Taxes to be paid- CGST, IGST, Additional Tax and SGST
• Three Modes of Payment
  • Electronic including CC/DC (Mode I)
  • Over The Counter Payment (for Payments upto ₹ 10,000/-) (Mode II)
  • Payment through RTGS/NEFT (Mode III)

• Payment can be accepted by Departmental officers in enforcement cases only

STAKEHOLDERS

• Taxpayer
• GSTN (Goods and Service Tax Network)
• Authorized banks
  • one e- FPB (Electronic Focal Point Branch) for each bank (in  Mode  I  &  II)  to  maintain  government account and report all receipts
  • all  branches  for  receiving  Over  the  Counter Payments
  • one or more front end service branch

…. STAKEHOLDERS

• All Banks- for NEFT/RTGS Mode of payment
• Reserve Bank of India
  • e- FPB (in Mode III)
  • Aggregator for accountal & reconciliation of receipts
• Accounting Authorities of Centre & States
• Tax Authorities of Centre & States

BASIC FEATURES….

• Electronically generated Challan from GSTN for all 3 modes  containing  a  unique  14-digit  Common  Portal Identification Number (CPIN) for each challan
• Challan can be generated by
  • Taxpayer
  • His authorized representative
  • Departmental officers
  • Any other person paying on behalf of taxpayer
• Certain key details like name, address, email, GSTIN of payer to be auto-populated
• Single challan / instrument for payment of all four types of taxes
• Challan once generated to be valid for 7 days
• Time of payment: from 0000 hrs. to 2000 hrs.
• Proposed  workflow  of  RBI’s  e-Kuber  model  to  be followed for payment, accounting and reconciliation:
  • Accounting Authorities to interact directly with RBI & not with Authorized banks in case of discrepancies found during reconciliation
• System  of  electronic  Personal  Ledger  Account  (cash ledger) on GSTN for each taxpayer (20 pages)
• One e-FPB per Authorized Bank (in Mode I & II) / RBI (in  Mode -III)
• GSTN  to  be  anchor  in  payment  process  with responsibility for information flow to various agencies
• RBI to act as aggregator and anchor of flow of fund and information about receipts

WORK FLOW FOR PAYMENT UNDER MODE -I ….

E-payment  mode   through  authorized  banks (internet banking , CC/DC):

• Generation of e-Challan at GSTN
• Tax payer to select e-payment mode
  • Net Banking
  • Credit/Debit Card of any bank
  • Tax Payer to choose Authorized bank in case of Net Banking
  • Payment gateway of authorized bank (or their SPVs) in case of CC/DC
• Credit Card proposed to be used by taxpayer to be registered at GSTN - as an additional safety check to eliminate the issue of charge back
• GSTN  to  direct  the  taxpayer  to  the  website  of  selected bank/payment gateway
• Alongside, GSTN to forward an electronic string to the selected bank carrying specified details of challan on real time basis
• Taxpayer to make payment using the USER ID & Password provided by his bank
• On successful completion of transaction, e-FPB of bank to forward a confirmation electronic string (CIN) to GSTN on real time basis
• GSTN to credit the Taxpayer’s ledger
• Copy of paid Challan to be available on GSTN for taxpayer (downloadable/printable)

WORK FLOW FOR PAYMENT UNDER MODE -II ….

Over the Counter Payment:

• For small taxpayers for making payment upto ₹ 10,000/- per challan - by cash / DD / cheque drawn on same bank or on another bank in the same city
• Tax payer to tender only one instrument to pay one  or more type of tax
• For cheque payment, name of authorized bank & its  location to be mandatorily filled in challan
• On real time basis, GSTN to share challan details with Core Banking System (CBS) of the selected authorized  Bank
• Taxpayer to approach the branch of the authorized bank for payment of taxes along with the instrument or  cash
• In  case  of  cash  /  same  bank  instrument  a  unique  transaction  number (BTR/BRN)  will  be  generated immediately by the authorized bank’s system and given to taxpayer
• Authorized bank to send receipt information (CIN) to  GSTN on real time basis
• In case of instruments drawn on another bank in the same city, payment would not be realized immediately
• Authorized Bank to inform GSTN on real time basis in  two stages
  • when an instrument is given OTC - to send an electronic  string to GSTN containing specified details
  • second acknowledgement - after the cheque is realized  with 3 additional details
• Similarly, bank to issue acknowledgement to taxpayer  in two steps
  • Acknowledgment of cheque immediately
  • Upon realization of cheque, issuance of BTR / BTN
• GSTN to credit the Taxpayer’s Ledger

WORK FLOW FOR PAYMENT UNDER MODE -III….

Payment through NEFT/RTGS from any bank

• To be made operational after a pilot run by RBI
• For taxpayers:
  • not having a bank account in any of the Authorized Banks
  • having a bank account in any of the Authorized Banks
• No limit on amount to be paid through this mode
• Payments to be collected by RBI directly
• RBI to perform the role of e-FPB also
• Challan  and  NEFT/RTGS  mandate  form  generated  on  GSTN
  • NEFT/RTGS mandate form to have validity period of CPIN  printed on it
• In challan, the field for name of Authorized Bank to be  auto-populated as RBI
• NEFT/RTGS mandate form will have certain information  auto-populated: 
  • CPIN in “Account Name” field
  • ‘GST Payment’ in “Sender to Receiver Information” field
• Taxpayer   to print a copy of Challan and NEFT/RTGS  mandate  form  from  GSTN  &  approach  his  bank  for  payment
• Amount indicated for remittance to be transferred by  bank  to  the  designated  account  of  the  government in RBI along with challan details and a Unique Transaction Reference (UTR) Number
• RBI to validate payments against each challan with UTR received from remitter bank
• RBI to report receipt of payment to GSTN (CIN) on real time basis through an electronic string  with specified details
• GSTN to credit the Taxpayer’s ledger

FEATURES OF ACCOUNTING PROCESS….

• Authorized Banks to send list of CIN-wise details (electronic luggage file) for each type of Tax (CGST, IGST, AT & SGST) per day to RBI and Accounting Authorities at End of Day (EOD)
• RBI through its e-kuber system to consolidate the lists received from all authorized banks, debit their accounts and correspondingly credit Tax accounts of GOI / respective State Governments
• RBI to send digitally signed one e-scroll for each type of Tax (CGST, IGST, AT & SGST) per day (39) to Accounting Authorities of Central Government and State Governments & GSTN on T+1 basis
• GSTN  to  send  reconciled  data (challan  data  from Authorized Banks and e-scroll from RBI) to Accounting Authorities at EOD
• For any discrepancy noticed, accounting authority to generate a Memorandum of Error (MOE) & send to RBI
• RBI to resolve the discrepancy in consultation with the Authorized Bank
• RBI to report the corrected data to respective Accounting Authority & GSTN
• Taxpayers Master data to be provided by Tax Authorities to  Accounting  Authorities  for  mapping  of  payment details jurisdiction wise

PROPOSED ACCOUNTING SYSTEM

• Four different Major Heads of accounts to be opened for each tax along with underlying Minor Heads to account  for  various  taxes  &  other  receipts  like interest, penalty, fees & others
• Standardized  uniform  Accounting  Codes  for  all taxes under GST regime among Centre, State & UTs to  facilitate  settlement  of  IGST  on  the  basis  of centralized reporting
• Common Accounting Codes for Centre & States

BANKING ARRANGEMENTS

• Common  set  of  Authorized  Banks  comprising  existing   authorized   banks   of   the   Central  Government   &   all   State   Governments/UTs  (presently 26)
• Certain minimum standards to be met by banks to become authorized banks
• A  system  of  penalty/incentive  proposed  for reporting of error free data
• Payments    through    non-authorized    banks permitted (NEFT/RTGS)

RECONCILIATION OF RECEIPTS

• Use of only system generated challans - no re-digitization by any actor in the entire work flow
• CPIN to be generated by GSTN -- to be used as a key identifier up till receipt of payment by Bank
• CIN (actual indicator of receipt of payment) to be generated by collecting Bank -- to be used as a key identifier thereafter for accounting, reconciliation, etc.
• Accounting  Authorities  to  play  a  paramount  role  in reconciliation -
  • Accounting on the basis of RBI data
  • Reconciliation on the basis of GSTN and bank data

GRIEVANCE REDRESSAL

• In OTC mode if cash ledger of taxpayer not credited  within   three  days-  approach  bank where instrument presented
• In RTGS/NEFT mode if cash ledger of taxpayer not credited within three days- approach bank where taxpayer’s account is
• Each e-FPB required to have front end service branch to resolve payment related issues

GST electronic payment process uses a single challan (CPIN), three payment modes, and real time CIN reconciliation. Establishes an end-to-end electronic GST payment system using a GSTN issued common challan with a unique CPIN, three payment modes (internet/card, OTC for small amounts, and NEFT/RTGS via RBI), real time transmission of electronic strings and CIN confirmations from collecting banks/RBI to GSTN, centralized taxpayer cash ledgers on GSTN, e FPBs per bank, and an RBI e kuber accounting and reconciliation workflow with standardized accounting codes for CGST, IGST, Additional Tax and SGST.