To make tax payments less cumbersome for taxpayers, the government has proposed that over-the-counter cash payments of ₹10,000 and above as tax by private companies and traders will not be allowed under the goods and services tax (GST) regime.

The draft payment rules, released by the Central Board of Excise and Customs (CBEC), have instead recommended that all tax payments under GST be done electronically through Internet banking, debit/credit card or NEFT/RTGS.

Only outstanding dues and funds seized during investigation or recovery by notified persons, officers or government departments may be deposited over-the-counter in cash, according to the draft rules.

The CBEC has also issued draft rules for registration and invoices under the GST, both of which depend on electronic interface through the GST network (GSTN) portal.

Seeking public comments on the three sets of draft rules by September 28, the CBEC said, “Corresponding changes in the Model GST Law are being carried out separately.” Rules on other issues such as returns are still awaited.

The draft rules and formats will be taken up for finalisation by the GST Council when it meets again on September 30.

The draft rules state that all persons who are already registered as assessees under an “earlier law” such as Central Excise or service tax and having a Permanent Account Number (PAN) will be given a provisional registration, and the GST Identification Number (GSTIN) would be available on the GSTN portal.

Plugging tax evasion

To prevent tax evasion, the PAN details of each applicant will be verified before giving them a GSTIN.

New applicants would be expected to provide details of their PAN, mobile number and e-mail address and the application would be verified in three working days. Non-resident applicants would be mandated to seek registration at least five days before they start their business activities in the country.

The draft rules have prescribed the maintenance of an electronic ledger by each registered taxable person “for crediting the amount deposited and debiting the payment towards tax, interest, penalty, fee or any other amount”.

Invoicing procedures

For supply of goods, all invoices should be made in triplicate. In case of exports, the invoice shall carry an endorsement stating that it is meant for export on payment of Integrated GST.

Tax experts welcomed the draft rules and said it would lower the chances of harassment as most processes have to be done online.

“It is a good development as a lot of detailing of GST by companies would be contingent on the rules,” said Pratik Jain, Leader, Indirect Tax, PwC India.