Payment of GST & Other Amounts in Installments: Section 80 & Rule 158

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Small and medium business owners and startup founders in India often struggle with payment of their Goods and Services Tax (GST) liabilities and other outstanding amounts. Section 80 of the Central Goods and Services Tax (CGST) Act, 2017 provides some relief in this regard by allowing taxpayers to pay their GST liabilities and other amounts in installments. Additionally, Rule 158 of the Central Goods and Services Tax Rules, 2017 lays down the procedure for payment of GST and other amounts in installments. This article provides a detailed explanation of these provisions.

Section 80 of the CGST Act, 2017

Section 80 of the CGST Act, 2017 empowers the Commissioner to allow a taxpayer to pay his GST liabilities and other amounts due in installments, subject to certain conditions. The conditions are as follows:

The amount due must be more than INR 10,000.
The taxpayer must have paid at least 1/4th of the amount due before the due date.
The taxpayer must file a request in Form GST DRC-20 to the jurisdictional Commissioner.
The jurisdictional Commissioner must be satisfied that the payment of the amount due in a lump sum would cause undue hardship to the taxpayer.

If the above conditions are satisfied, the Commissioner may allow the taxpayer to pay the amount due in a maximum of 24 monthly installments. The first installment must be paid at the time of filing the request in Form GST DRC-20. The subsequent installments must be paid on or before the same date of every month.

Rule 158 of the CGST Rules, 2017

Rule 158 of the CGST Rules, 2017 lays down the procedure for payment of GST and other amounts in installments. The procedure is as follows:

The taxpayer must file a request in Form GST DRC-20 to the jurisdictional Commissioner along with the proof of payment of 1/4th of the amount due before the due date.
The Commissioner must issue an order allowing the payment of the amount due in installments.
The taxpayer must pay the first installment at the time of filing the request in Form GST DRC-20.
The subsequent installments must be paid on or before the same date of every month.
The taxpayer must also file a statement in Form GST DRC-21 every month showing the details of the amount paid and the balance due.

The taxpayer must pay interest on the amount of the installment due for the period of delay in payment, at the rate applicable to the tax payable for the period for which the delay has occurred. The interest must be paid along with the installment due.

Conclusion

Section 80 of the CGST Act, 2017 and Rule 158 of the CGST Rules, 2017 provide some relief to small and medium business owners and startup founders in India who struggle with payment of their GST liabilities and other outstanding amounts. By allowing payment of these amounts in installments, these provisions reduce the burden on taxpayers who face financial difficulties. However, it is important to note that the conditions and procedures laid down in these provisions must be strictly followed to avoid any adverse consequences.