What is NEFT or RTGS option under GST

Meaning of NEFT or RTGS option under GST

 

The details about NEFT or RTGS option under GST are explained here.

National Electronic Funds Transfer (NEFT)

National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals can electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country participating in the Scheme.

NEFT/RTGS option under GST

Another payment option for GST Payment will be NEFT (National Electronic Funds Transfer) /RTGS (Real Time Gross Settlement) from the taxpayer’s bank account, which may or may not be the authorized bank under the GST regime. All the provisions are same as the second option, which is Over the Counter Payment (OTC) with the additional advantage of making payment through your own bank where you have an account. Two stake holders get added to the list in the third option and are the taxpayer’s bank branch and the RBI acting as the authorized bank.

The Joint committee which presented the report on the payment processes under GST has recommended that the third option of payment must be scaled up gradually. The RBI is also testing this concept in the state of Karnataka and based on the experience will go ahead with the development of this mode of payment.

The validity under this mode is similar to the OTC option and stands at seven days. In case of a delay the money will be returned to the taxpayer’s bank account. After two such instances the taxpayer would be debarred from using the NEFT/RTGS payment option for tax deposit under GST.

The taxpayer would access the GST Network through the internet for the generation of the challan for making the tax payment. He will fill in all the details of the taxes and choose the NEFT/RTGS option from any bank. The RBI would be directly involved in the role of the authorized bank and e-FPB in this mode of payment. The name of the authorized bank would be auto populated as RBI. After the challan is generated, no modification can be made to it. Also the unique Common Portal Identification Number (CPIN) and IFSC code of RBI pooling bank account would be available on the NEFT/RTGS mandate in the challan printout.

In a major shift from the OTC payment option, the NEFT/RTGS method allows for payment only against cheques and does not allow cash payments. Within the stipulated time frame of a maximum of seven days, the taxpayer has to approach his bank branch with the copy of the generated challan, the NEFT/RTGS mandate, and the cheque for payment.

Since, the bank will provide the NEFT/RTGS services to the client it will apply the transaction charge for the same. The taxpayer has to fill the cheque amount as a total of the tax payment and NEFT/RTGS charge of the bank. While the tax is paid to the RBI pool account, the commission is claimed by the taxpayer’s bank.

Once the transaction is through, the taxpayer will get a receipt having the unique transaction reference number or UTR. The taxpayer is required to login into the GSTN portal and update the challan details with the UTR. The GSTN will communicate this information to RBI which will link it to the CPIN. All this happens on real time basis and an electronic string containing the entire information is generated. This completes the process and the GSTN credits the tax paid challan to the cash ledger of the tax payer.

The information on NEFT or RTGS option under GST is detailed above.   Comment below your thoughts on NEFT or RTGS option under GST

 

 

 

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