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💳 Payments — GST Reference Notes

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1. GST Payment Flow — Overview

Paying GST involves three steps: (1) Create a challan on the GST portal to generate a CPIN, (2) Make the payment through a bank (online/offline), (3) The bank credits the Electronic Cash Ledger and issues a CIN. The sequence CPIN → Payment → CIN must be followed. Tax is payable at the time of filing GSTR-3B.

2. Types of Challans

Challan Type	Used For	Who Uses It
PMT-06	Monthly tax deposit for QRMP filers (Month 1 and Month 2 of quarter)	QRMP-scheme taxpayers only
Standard GST Challan	Payment for any period (GSTR-3B, late fee, interest, penalty, demand)	All taxpayers
DRC-03	Voluntary payment of tax shortfall or in response to demand notice	All taxpayers

3. Payment Modes

Mode	Limit	Settlement Time	Best For
Net Banking	No limit (bank dependent)	Instant	All online payments
Debit Card	₹1 lakh per day (most banks)	Instant	Small to medium payments
Credit Card	₹1 lakh per day (most banks)	Instant	Small to medium payments
NEFT / RTGS	No limit	1 working day	Large payments > ₹2 lakhs
Over the Counter (OTC)	Up to ₹10,000 only	Same day	Only for very small payments at authorised bank branches

ℹ️ Note

The challan (PMT-06 or standard) is valid for 15 days from generation. If you do not complete payment within 15 days, the CPIN expires and you must generate a new challan. Expired challans are NOT credited to the Cash Ledger.

4. CPIN vs CIN — Critical Distinction

Term	Full Form	Generated By	Meaning	Valid?
CPIN	Common Portal Identification Number	GST Portal on challan creation	Identifies the challan	For 15 days — expires if not paid
CIN	Challan Identification Number	Bank after successful payment	Confirms tax has been paid	Permanent record of payment

If you have only a CPIN but no CIN, the payment has NOT gone through. Always verify the CIN before claiming the Cash Ledger has been credited.

5. Head-Specific Ledger Rules

Head	Can Pay	Cannot Pay
IGST Cash	IGST liability	CGST or SGST directly (though IGST ITC can flow to CGST/SGST)
CGST Cash	CGST liability, CGST late fee, CGST interest	SGST, IGST
SGST Cash	SGST liability, SGST late fee, SGST interest	CGST, IGST
Cess	Cess liability only	Any other head

6. Challan History and Payment Receipt

**Path on portal:** Services → Payments → Challan History

Shows all challans with:

•CPIN (challan number)

•Date of creation

•Heads and amounts

•Status: Paid (green), Expired (red), Pending

•CIN when paid

The payment receipt (PDF) can be downloaded from Challan History. This receipt is:

•Official proof for audit purposes

•Required for bank reconciliation

•Admissible as evidence in GST proceedings

•Retention required for 8 years (GST record retention mandate)

🔢 Formula

Tax Due Date (GSTR-3B Monthly) = 20th of following month

QRMP Month 1 & 2 (PMT-06) = 25th of following month

QRMP Month 3 (GSTR-3B) = 22nd of month after quarter (for states with population < 1 crore) or 24th (larger states)

❓ Problem

A taxpayer generates a challan on 1 March for CGST ₹50,000 and SGST ₹50,000. He makes the payment via NEFT on 14 March. The bank processes the NEFT on 15 March. Is the challan still valid?

✅ Solution

The challan was generated on 1 March and is valid for 15 days — i.e., up to 15 March. The NEFT was initiated on 14 March and processed (credited to Cash Ledger) on 15 March. Since 15 March is within the 15-day window (1 March to 15 March inclusive), the challan is still valid and the payment is credited. The CIN will be generated on 15 March when the bank confirms the credit.

❓ Problem

A taxpayer has CGST Cash Ledger balance ₹20,000 and SGST Cash Ledger balance ₹20,000. GSTR-3B shows IGST liability ₹15,000. Can she use CGST and SGST cash to pay IGST?

✅ Solution

NO. CGST cash and SGST cash CANNOT be used to pay IGST directly. The heads are separate. She must deposit ₹15,000 into the IGST head of the Cash Ledger by creating a new challan. After paying the IGST, CGST and SGST cash balances remain in their respective heads and can be used for CGST and SGST liabilities in future returns.

✏️ MCQ Practice — 50 Questions

1.GST payment is made via which instrument?
(A) Demand Draft only (B) Electronic Challan — CPIN generated on GST portal (C) Cheque to GST officer (D) Cash at district office

2.CPIN stands for:
(A) Common Portal Identification Number — 14-digit challan number (B) Central Payment Instruction Note (C) Challan Payment Invoice Number (D) Credit Processing Identification Number

3.CIN stands for:
(A) Challan Identification Number — 17-digit number issued by bank on successful payment (B) Central Invoice Number (C) Common Input Number (D) Challan Invoice Notification

4.A CPIN (challan) is valid for payment for how many days?
(A) 3 days (B) 7 days (C) 15 days (D) 30 days

5.Online payment modes available for GST challan include:
(A) Internet banking only (B) NEFT/RTGS only (C) Internet banking, NEFT, RTGS, and over-the-counter at bank (D) Credit card and UPI only

6.Over-the-counter (OTC) cash payment at bank for GST is limited to:
(A) ₹10,000 per challan (B) ₹50,000 per challan (C) ₹1,00,000 per challan (D) No limit for OTC

7.Tax, interest, penalty, and late fee in GST are paid under which heads in the challan?
(A) A single consolidated head (B) IGST, CGST, SGST/UTGST, and CESS — each with sub-heads: Tax, Interest, Penalty, Fee, Others (C) Only Tax and Penalty heads (D) IGST and CGST only

8.Can CGST cash balance be used to pay SGST liability?
(A) Yes — all cash is fungible (B) No — Cash Ledger balances are tax-head-specific; CGST cannot pay SGST (C) Yes, if approved by officer (D) Yes, only if above ₹1 lakh

9.PMT-06 is a payment form used by:
(A) All GSTR-3B filers (B) QRMP taxpayers for paying tax in months 1 and 2 of the quarter (without filing GSTR-3B) (C) Composition dealers for CMP-08 (D) Exporters for claiming refund

10.PMT-06 payment must be made by which date?
(A) 10th of the following month (B) 20th of the following month (C) 25th of the following month (D) 13th of the following month

11.PMT-07 is filed for:
(A) Paying GST on imports (B) Grievance when CPIN-linked payment is not reflected in Cash Ledger (C) Transferring ITC between heads (D) Requesting a refund

12.PMT-09 is used to:
(A) File nil GSTR-3B via SMS (B) Transfer funds between sub-heads within the Electronic Cash Ledger (e.g., from CGST Tax to IGST Tax) (C) Generate a new CPIN (D) Claim TCS credit

13.After payment is made, how does GSTN confirm the payment?
(A) Taxpayer manually enters CIN (B) Bank sends CIN to GSTN; GSTN auto-credits Cash Ledger (C) Officer manually updates ledger (D) NEFT network auto-credits within 24 hours

14.Payment of tax via NEFT/RTGS uses which form?
(A) PMT-06 (B) Mandate form (EIS — Electronic Payment through Mandate) generated after CPIN (C) PMT-09 (D) GST REG-21

15.Which payment mode is FASTEST for GST challan payment?
(A) NEFT (B) RTGS (C) Internet banking (immediate — real-time) (D) OTC at bank

16.GSTR-3B filing without paying the full tax liability results in:
(A) Automatic debit from bank account (B) Interest on the unpaid portion from due date to payment date at 18% p.a. (C) Cancellation of GSTIN (D) DRC-01B notice immediately

17.A GST challan that expires (not paid within 15 days) requires:
(A) Extension from GST officer (B) Generating a fresh challan with a new CPIN (C) Automatic renewal (D) Payment at GSTN office directly

18.The "Track Payment Status" feature on GST portal allows tracking using:
(A) CPIN only (B) CIN number provided by bank (C) GSTIN of taxpayer (D) Invoice number

19.Payment receipt (Challan Receipt) is available on GST portal after:
(A) CPIN generation (B) Successful payment — CIN is issued by bank and receipt shows CIN + payment details (C) GSTR-3B filing (D) Annual return filing

20.GST payment of RCM (Reverse Charge) must be made from:
(A) Credit Ledger (ITC) (B) Cash Ledger only — ITC cannot be used to discharge RCM liability (C) Either ledger (D) Supplier's Cash Ledger

21.After paying RCM tax from Cash Ledger, the ITC on that RCM can be claimed:
(A) Never (B) Immediately in the same return under Section 4(A)(2/3) (C) After 3 months (D) Only in GSTR-9

22.Composition dealers pay GST via:
(A) GSTR-3B (B) CMP-08 challan — quarterly basis (C) PMT-06 (D) Monthly GSTR-1

23.QRMP taxpayers using the Fixed Sum Method for PMT-06 pay:
(A) 100% of last quarter's tax liability (B) 35% of net cash tax paid in last filed GSTR-3B (C) 50% of last month's tax (D) 25% of last year's total tax

24.The interest for excess ITC fraudulently claimed is:
(A) 12% p.a. (B) 18% p.a. (C) 24% p.a. (D) 36% p.a.

25.Interest on late payment of GSTR-3B tax starts from:
(A) Date the invoice was raised (B) Next day after GSTR-3B due date (C) Date GSTR-1 was filed (D) Date of GSTR-2B generation

26.GST late fee is always paid from which head in the Cash Ledger?
(A) Tax head (B) Interest head (C) Fee head (D) Penalty head

27.Penalty in GST is paid from which head?
(A) Tax head (B) Fee head (C) Penalty head in Cash Ledger (D) Interest head

28.Nil returns (zero tax liability) are still subject to:
(A) No penalty (B) Late fee if filed after due date (C) Interest at 18% (D) Both late fee and interest

29.Which section of CGST Act deals with payment of taxes?
(A) Section 16 (B) Section 49 (C) Section 22 (D) Section 68

30.When a taxpayer deposits money into the Cash Ledger via challan, the entry is made under:
(A) Liability Ledger (B) Credit Ledger (C) Electronic Cash Ledger (D) Output tax account

31.The "Others" sub-head in the GST Cash Ledger is used for:
(A) Additional tax payments (B) Miscellaneous dues — e.g., court-ordered payments, other demands (C) Advance tax (D) Professional tax

32.A wrongly deposited amount in CGST head that should have gone to IGST can be corrected via:
(A) Refund only — cannot be transferred (B) PMT-09 (reallocation between sub-heads in Cash Ledger) (C) Filing GSTR-9C (D) Officer approval only

33.The IndIaTaxSim payment gateway (portal) simulates a real bank payment and:
(A) Deducts from a simulated bank account and credits the GST Cash Ledger (B) Only shows the challan — no actual deduction (C) Credits the Credit Ledger directly (D) Files GSTR-3B automatically after payment

34.In IndIaTaxSim, demo data sets Cash Ledger balance to:
(A) ₹1,00,000 (B) ₹50,000 (C) ₹0 — students must pay via challan before filing GSTR-3B (D) Random value

35.A challan can be paid by a third party (not the taxpayer) on behalf of the taxpayer:
(A) No — only the registered taxpayer can pay (B) Yes — any person can deposit using the taxpayer's CPIN (C) Only if the third party is also GST-registered (D) Only with officer's written permission

36.In GSTR-3B, the offset of ITC against tax liability happens automatically or manually?
(A) Automatically by GSTN (B) Manually — taxpayer chooses how to apply ITC to each tax head (C) By the tax officer (D) Automatically only for IGST head

37.CIN has how many characters/digits?
(A) 14 digits (B) 17 digits (15-digit bank BSR code + 6-digit date + 7-digit challan sequence) (C) GSTIN length (15) (D) 10 digits

38.E-payment of GST can be done via:
(A) Only the GST portal (B) GST portal OR bank's own net banking portal (using CPIN) (C) Only NEFT terminal (D) Government payment gateway only

39.Payment of tax through the GST portal requires the taxpayer to have:
(A) A debit card linked to GST (B) A CPIN (generated after entering challan details on the portal) (C) Biometric authentication (D) DSC (Digital Signature Certificate) compulsorily

40.Which statement about GST payment is TRUE?
(A) Tax can be paid before GSTR-3B filing or at the time of filing (B) Tax can only be paid after GSTR-3B is submitted (C) Tax must be paid within 3 days of GSTR-3B filing (D) Tax is auto-deducted from the bank linked to GSTIN

41.A taxpayer has ₹10,000 in IGST Cash Ledger and ₹8,000 IGST tax due. The remaining ₹2,000:
(A) Is refunded automatically (B) Stays in Cash Ledger for future use or refund application (C) Is transferred to CGST head automatically (D) Lapses at month end

42.Late fee for nil GSTR-1 (no supplies) is:
(A) ₹50/day (B) ₹20/day (C) ₹100/day (D) No late fee — nil returns are exempt from late fee

43.Payment of TDS by government departments under Section 51 is due by:
(A) 20th of following month (B) 10th of following month (C) 7th of following month (D) Last day of the following month

44.TCS collected by e-commerce operators must be paid by:
(A) 10th of following month (via GSTR-8) (B) 20th (C) 25th (D) 30th

45.IndIaTaxSim payment receipt PDF is generated using:
(A) jsPDF (B) Server-side PDF API (C) Browser print dialog (D) Supabase PDF function

46.The payment receipt in IndIaTaxSim shows:
(A) Only CIN (B) CPIN, amount paid, tax heads, date, GSTIN, and payment reference (C) Only the total GST amount (D) IRN number of the invoice paid

47.For PMT-06 (QRMP monthly payment), tax can be calculated using the Self-Assessment Method. This means:
(A) 35% of last quarter's tax (B) Actual tax liability calculated for the month based on outward supplies (C) 50% of GSTR-2B ITC for the month (D) Estimated turnover × average rate

48.If PMT-06 tax is underpaid for Month 1 and 2, the shortfall is adjusted in:
(A) Next month's PMT-06 (B) Quarterly GSTR-3B — balance tax paid at the time of GSTR-3B filing (C) Annual return GSTR-9 (D) GSTR-1 of Month 3

49.Which of the following is NOT a payment sub-head under GST?
(A) Tax (B) Interest (C) Advance Tax (D) Fee

50.After GSTR-3B is filed with tax offset applied, the Cash Ledger balance is:
(A) Unchanged (B) Reduced by the amount of cash used to offset liability (C) Increased by ITC claimed (D) Reset to zero

Answer Key

1–B 2–A 3–A 4–C 5–C 6–B 7–B 8–B 9–B 10–C 11–B 12–B 13–B 14–B 15–C 16–B 17–B 18–B 19–B 20–B 21–B 22–B 23–B 24–C 25–B 26–C 27–C 28–B 29–B 30–C 31–B 32–B 33–A 34–C 35–B 36–B 37–B 38–B 39–B 40–A 41–B 42–B 43–B 44–A 45–A 46–B 47–B 48–B 49–C 50–B

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