Posted by Akash Goel
On 4 May 2020

From the starting when GST came into the force, there have always been some technical problems on the GST portal or might be people are not completely educated about the GST and may deposit tax or fees or interest or penalty under wrong heads which may lead to blockage of funds and also effects there smooth functioning of business activities.

As per the process of GST, once the taxpayer pays the challan the payment gets into the head and the same can be utilized in settling their relevant output liabilities after adjusting with the Input Tax Credit. But in some cases when the payment is done in the wrong head then the same amount can’t be used against discharging the liabilities of that head due to which taxpayer needs to pay another challan.

An example for the complete understanding

Suppose ‘A’ is a taxpayer of Delhi and he has provided services within Delhi and within a month he has a tax liability of Rs 100. So as per GST rules he need to pay tax under the head of CGST and SGST of Rs 50 each but mistakenly he has paid tax in the head of IGST and SGST of Rs 50 each. So the amount of Rs 50 which he paid under the head of IGST can’t be used to set off the liability of CGST. So again he needs to pay another challan of Rs 50 under the head of CGST.

In this case Rs 50 which he had paid under the head IGST can be claim back by filing the RFD-01 by choosing the option at the time of refund application of “Excess balance in cash electronic ledger”. But taking refund from the Government is not an easy task, a taxpayer need to go through a long process which certainly takes more than some months due to which the working capital of the taxpayer gets blocked.

In order to get over this problem Government has made amendment in Finance Act 2019 by inserting sub section 10 and 11 to Section 49 of CGST Act, 2017 on 30th August 2019 which is applicable w.e.f 01st Jan, 2020 in accordance with Rule 87 of the CGST Rules 2017.

Sec 49 (10) and (11) explained below.

10) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fees or any other amount available in the electronic cash ledger under this Act, to the electronic cash ledger for integrated tax, central tax, state tax, Union territory tax or cess, in such form and manner and subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be a refund from the electronic cash ledger under this act.

11) Where any amount has been transferred to the electronic cash ledger under this act, the same shall be deemed to be deposited in the same ledger as provided in sub-section (1).

Form PMT-09 enables taxpayer to transfer amount from one minor head/ major head to another minor head/major head. For instance, taxpayer has paid ₹10,000 under SGST. Now by filing PMT-09, he can shift that amount to IGST/CGST/Cess also.

Minor Head refers to — Tax, Interest, Penalty, Fees and other

Major Head refers to – Integrated Tax, Central Tax, State Tax and Cess.

Important Points about PMT-09 are as follows.

  1. If the wrong tax has already been utilized for making any payment, then this challan is not useful. In simple words this challan is useful only when payment is done in the wrong head and not utilized.
  2. This challan only allows shifting of the amounts that are available in the electronic cash ledger.
  3. The amount once utilized and removed from cash ledger can’t be reallocated.

Conclusion Now mistake in payment of GST in wrong head can be rectified by filing one simple Form i.e. PMT 09.

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