As a business owner or vendor, your job as a provider of goods and services is to educate yourself on the Goods and Service Tax (GST) and how it works. Under the GST regime, you will need to register your business and make online GST payments.

What is GST?

GST is a single tax levied on suppliers of goods and services in place of the array of taxes that were imposed under the previous tax structure. These taxes were Entertainment Tax, Sales Tax, Value Added Tax (VAT), and so forth. GST has done a lot to simplify the calculation of taxes and eliminate the cascading effect of the taxes mentioned earlier or double taxation.

Are you liable to make a GST payment?

As you dive into the GST world, this is a question you must ask yourself. It is vital to know under what conditions you must make a GST payment online. The following situations or scenarios call for a GST payment online:

• Having completed your GST registration online and supplying goods and services that are taxable under the GST act.

• You will need to make a GST payment online if you are registered to GST under the Reverse Charge Mechanism (RCM).

• If you happen to be an E-commerce operator and make supplies under various categories, you will have to make a GST payment.

• Registering yourself under GST and deducting TDS is another situation that calls for a GST payment online.

• If you are an operator of E-Commerce registered under GST and need to collect TCS, you will have to pay GST.

Types GST Payments that you need to make

Here are the main types of GST you need to know of:

Integrated GST (IGST)

The Integrated GST or IGST is imposed by the central government whenever a supply of goods or services is made between states

Central GST (CGST)

CGST is levied by the central government whenever a supply of goods or services is made within a state.

State GST (SGST)

The state government imposes the SGST when there is a supply of goods or services made within the state.

The Process of making a GST payment

There are a few simple steps you have to follow to make a GST payment online. Here they are:

• Click on the official GST site and fill in the essential details like your username, password, and the captcha code that is displayed, and sign in to your account on the GST portal online.

• Once this is done, go to the ‘Services’ tab, head over to payments, and click the ‘Create Challan’ option.

• You need to enter the amount that you are liable to pay and select the payment method you want to use to sanction the payment. You will find a variety of payment options for you to choose from, such as over the counter, Netbanking, Debit Card, Credit Card, and NEFT/RTGS. Fill in all the vital details and click on ‘Generate Challan.’

• Now, you will get a summary of the challan that consists of all the critical information. Click on the MAKE PAYMENT button to finalize your payment.

• Once you’ve made the GST payment, you will receive a challan that contains all the tax-related details. The challan for the tax payment you’ve sanctioned will be sent to your cash ledger account.

What are the types of Payment Modes?

If you want to make your GST payments online, here are two ways you can do it:

Through Credit Ledger

If you qualify, you can choose the option of Input Tax Credit (ITC) to handle your GST payment. However, the ITC can cover only your GST payments. You cannot use ITC to pay interest, penalties, or late fees.

Through Cash Ledger

You have the option of making GST payments online or offline. In any case, you will have to ensure the challan is produced on the GST portal.

If you are new to GST payments and the working of GST, this should be enough to get you started so that you remain in good books with the government and the market.