How to Pay GST Online: Challan, Ledgers and the Errors That Cost Money

GST is paid by generating a challan, paying it, and letting the credit land in your electronic cash ledger. The return is then filed against that ledger. Understanding the three ledgers is what makes the rest of it straightforward, and what prevents the two errors that cost businesses the most: paying under the wrong head, and paying money you did not need to pay because credit was available.

The three ledgers

Ledger	What it holds
Electronic cash ledger	Money you have actually paid in, held head-wise: IGST, CGST, SGST, cess, and within each, tax, interest, penalty and fee.
Electronic credit ledger	Input tax credit available to you, as reflected in GSTR-2B.
Electronic liability register	What you owe for the period, from the return.

Liability is discharged first from the credit ledger, to the extent the credit can lawfully be used, and the balance in cash. Interest, penalty and late fee can only ever be paid in cash, never from credit.

Generating the challan

1. Log in to the GST portal and go to Services, Payments, Create Challan. A challan can also be created before logging in, using the GSTIN.
2. Enter the amounts head by head in Form GST PMT-06: IGST, CGST, SGST and cess, split between tax, interest, penalty, fee and others.
3. Select the payment mode.
4. Generate the challan. It carries a Common Portal Identification Number and is valid for 15 days.

The head-wise split is the part that has to be right. Money paid into the CGST head cannot be used to pay an SGST liability. It is not lost, but recovering it means filing for a transfer or a refund, and neither is quick.

Payment modes

• Net banking through an authorised bank. Immediate.
• Debit or credit card.
• UPI, where enabled.
• NEFT or RTGS, using the mandate form generated with the challan. Credit typically appears the same or the next working day. Use this for large payments, and do not leave it to the due date.
• Over the counter at an authorised bank, by cash, cheque or demand draft, subject to a limit of Rs 10,000 per challan per tax period. This limit does not apply to certain categories, including deposits made by government departments and by proper officers for recovery.

Transferring an amount already in the cash ledger

If money has gone into the wrong head, Form GST PMT-09 allows a transfer between heads and between major and minor heads within the same GSTIN. This is the fix for a mis-keyed challan and it avoids a refund application. It cannot move money between different GSTINs.

When a payment does not show up

The usual sequence is: the bank debits the account, but the challan status stays as awaiting payment.

• Check Services, Payments, Challan History first. Most delays resolve on their own within a short period.
• For NEFT and RTGS, allow a full working day before treating it as a failure.
• If the amount is debited and the status has not updated after that, raise a grievance under Services, User Services, Grievance / Complaints, quoting the CPIN and the bank reference number.
• Do not simply pay again. A duplicate payment lands in the cash ledger and then has to be refunded or carried forward, which is more work than waiting.

Interest, and why timing matters

Interest runs on tax paid late, calculated from the day after the due date until the date of payment. It is charged on the net cash liability in the ordinary case, and it cannot be paid out of credit. Because interest accrues daily, a payment made on the due date and a payment made three days later are not the same thing, even where the return is filed at the same time.

Late fee is separate from interest and attaches to the delay in filing the return rather than to the delay in payment.

Practical points

• Reconcile GSTR-2B before you decide how much to pay in cash. Businesses routinely pay in cash while eligible credit is sitting unclaimed because the reconciliation was done after filing rather than before.
• Generate the challan from the return, not from memory. The liability figure should come out of the return being filed.
• Watch the 15 day validity. An expired challan has to be regenerated.
• Keep the challan and the CPIN. It is the evidence of payment if the ledger ever disagrees with you.
• If the position is genuinely nil, there is nothing to pay and the return can be filed by SMS. See nil filing by SMS.

Let us run the GST cycle

We reconcile credit before filing rather than after a notice, compute the cash liability correctly, generate and pay the challan, and file on time. See GST return filing, GST services, or GST registration if you are just starting.

Book a call, or sign in at the TAXAJ client portal.

GST portal procedures and limits are revised from time to time. Confirm the current position before relying on any figure or limit stated here.