Key Takeaways
- GST payments are made only through challans generated on the GST portal (Form GST PMT-06); physical challans are not accepted
- Five payment modes available: net banking, UPI, NEFT/RTGS, credit/debit card, and over-the-counter (OTC limited to ₹10,000)
- Every challan expires in 15 days from generation (Rule 87(2), CGST Rules)
- Payments credit to your Electronic Cash Ledger (Section 49, CGST Act) under separate minor heads for tax, interest, penalty, fee, and others
- ITC utilization follows a mandatory sequence: exhaust IGST credit first, then CGST and SGST in any order (Rule 88A, February 2026 portal update)
How do you pay GST online in India? Generate a challan in Form GST PMT-06 on gst.gov.in under Services > Payments > Create Challan. Enter amounts under CGST, SGST/UTGST, IGST, and Cess heads, select a payment mode (net banking, UPI, NEFT/RTGS, or card), and complete payment. The amount credits instantly to your Electronic Cash Ledger under Section 49 of the CGST Act, 2017.
Why GST Payments Work Differently from Income Tax
GST does not use a single challan number that you fill in and hand to a bank teller. Every rupee you pay flows through the GST portal's Electronic Cash Ledger. You generate a digital challan, pay through it, and the portal auto-credits the amount to the correct ledger head. This ledger is then debited when you file your GSTR-3B.
There's no separate "payment" step after filing. When you file GSTR-3B, the portal first utilizes available ITC from your Electronic Credit Ledger, then debits remaining liability from your Electronic Cash Ledger. If your cash ledger doesn't have enough balance, you create a challan mid-filing to top it up.
How to Create a GST Challan (Step-by-Step)
You can create a challan with or without logging in. The pre-login option is useful when you need to deposit tax quickly without navigating through the return filing workflow.
Step-by-Step Guide
Create GST Challan on gst.gov.in
Form GST PMT-06 (Rule 87, CGST Rules 2017)
Go to GST Portal
Visit gst.gov.in. Click Services > Payments > Create Challan. You can also access this without logging in by entering your GSTIN on the pre-login page.
Select Reason for Challan
Choose the reason: Monthly Payment for Quarterly Return (QRMP taxpayers), Any Other Payment (voluntary deposit or self-assessment), or Reasons mentioned in existing Show Cause Notice / Demand Order.
Enter Tax Amounts
Enter amounts under each head: CGST, SGST/UTGST, IGST, and Cess. Each head has minor heads for Tax, Interest, Penalty, Fee, and Others. Enter amounts in the correct minor head.
Choose Payment Mode
Select one of five modes: E-Payment (net banking), UPI (available through 17+ banks), NEFT/RTGS (for high-value payments), Credit/Debit Card, or Over the Counter (up to ₹10,000 only).
Generate and Pay
Click Generate Challan. For e-payment/UPI/card, you're redirected to your bank's gateway. For NEFT/RTGS, download the mandate form and submit at your bank. Complete payment within 15 days.
Verify in Cash Ledger
After payment, check Services > Ledgers > Electronic Cash Ledger. Online payments (net banking, UPI, card) reflect the same day. NEFT/RTGS may take a few hours. OTC payments take T+1 business day.
Source: Rule 87, CGST Rules 2017; GST Portal tutorial (tutorial.gst.gov.in)
Pre-Login vs Post-Login Challan
You don't need to log in to create a challan. On the GST portal's homepage, click Create Challan under the Taxpayers section, enter your GSTIN, and proceed. This is identical to the post-login process except you skip the return filing workflow.
When to use pre-login: you're making a voluntary deposit, paying a demand, or your login is temporarily locked due to failed attempts.
Five Payment Modes Compared
Not every mode works for every amount. OTC has a hard cap. NEFT/RTGS has no upper limit but takes longer. Here's what you need to know.
Comparison
GST Payment Modes: Limits, Speed and When to Use
| Parameter | Mode | Details |
|---|---|---|
| E-Payment (Net Banking) | No upper limit | Instant credit to cash ledger. Redirected to bank gateway from GST portal. Most common mode for regular monthly payments. |
| UPI | Bank-specific limit (typically ₹1-2 lakh) | Instant credit. Available through 17+ banks. Fastest for small to mid-sized payments. Generate QR code on portal. |
| NEFT/RTGS | No upper limit | Credit within 2-4 hours. Download mandate form from portal, submit at bank. Best for high-value payments. No upper cap. |
| Credit/Debit Card | Bank-specific limit | Instant credit. Convenience charges may apply depending on your bank. Available through select banks. |
| Over the Counter (OTC) | Maximum ₹10,000 per challan per tax period | Cash, cheque, or demand draft at authorized bank branches. Takes T+1 day to reflect. Use only for small amounts. |
Source: Rule 87, CGST Rules 2017; GSTN Advisory June 2026
OTC Limit: Why It Matters
The ₹10,000 cap applies per challan per tax period. If your GSTR-3B liability for April 2026 is ₹15,000, you cannot split it into two OTC challans of ₹10,000 and ₹5,000 for the same period. You must use an online mode for amounts above ₹10,000.
Say you run a small retail shop with monthly GST liability of ₹8,000. You could technically use OTC every month. But if you miss a month and need to pay ₹16,000 covering two periods, you'll need net banking or UPI.
Electronic Cash Ledger: Your GST Wallet
Every challan payment lands in your Electronic Cash Ledger, maintained in Form GST PMT-05 on the portal (Section 49(1), CGST Act). Think of it as a digital wallet with compartments.
How the Ledger is Structured
The ledger has four major heads (IGST, CGST, SGST/UTGST, Cess) and each major head has five minor heads:
| Major Head | Minor Heads |
|---|---|
| IGST | Tax, Interest, Penalty, Fee, Others |
| CGST | Tax, Interest, Penalty, Fee, Others |
| SGST/UTGST | Tax, Interest, Penalty, Fee, Others |
| Cess | Tax, Interest, Penalty, Fee, Others |
Here's what trips up many taxpayers: amounts deposited under one minor head cannot be used for another. If you deposit ₹50,000 under "CGST Tax" and later owe ₹5,000 as "CGST Interest", the portal won't let you use that ₹50,000 to pay the interest. You need to create a separate challan depositing ₹5,000 specifically under "CGST Interest."
Refund of Excess Balance
Excess balance in your cash ledger after payment of all dues can be claimed as a refund under Section 54. File Form GST RFD-01 on the portal. The refund is processed after verification, typically within 60 days.
How ITC Utilization Works When You File GSTR-3B
When you file GSTR-3B, the portal doesn't simply debit your cash ledger. It follows a two-step process:
Step 1: Utilize available ITC from your Electronic Credit Ledger (auto-populated from GSTR-2B).
Step 2: Any remaining liability after ITC utilization is debited from your Electronic Cash Ledger.
The Mandatory ITC Utilization Order (Section 49A, Rule 88A)
You can't pick which credit to use first. The portal enforces this sequence:
- IGST credit must be fully exhausted first, against IGST liability, then against CGST and SGST in any order
- CGST credit can be used against CGST liability first, then against remaining IGST liability
- SGST credit can be used against SGST liability first, then against remaining IGST liability
- CGST and SGST credit can never cross-utilize against each other (this is absolute; there's no exception)
From February 2026, the GST portal gives you more flexibility in Step 2 and 3: once IGST ITC is fully exhausted, you can apply CGST and SGST ITC toward remaining IGST liability in any sequence. Before this change, the portal enforced a rigid order even within this step.
Practical Example
Your firm has these credits and liabilities for a month:
| Head | ITC Available | Liability |
|---|---|---|
| IGST | ₹2,00,000 | ₹1,50,000 |
| CGST | ₹80,000 | ₹1,20,000 |
| SGST | ₹80,000 | ₹1,20,000 |
Utilization:
- IGST ITC of ₹1,50,000 covers full IGST liability. Remaining IGST ITC: ₹50,000.
- Remaining ₹50,000 IGST ITC splits toward CGST (₹25,000) and SGST (₹25,000). Now CGST liability remaining: ₹95,000. SGST remaining: ₹95,000.
- CGST ITC of ₹80,000 covers ₹80,000 of CGST liability. Remaining CGST liability: ₹15,000.
- SGST ITC of ₹80,000 covers ₹80,000 of SGST liability. Remaining SGST liability: ₹15,000.
- Cash payment needed: ₹15,000 CGST + ₹15,000 SGST = ₹30,000 via challan.
What Happens If You Pay Late
Interest under Section 50 of the CGST Act applies on late GST payments:
- 18% per annum on tax paid after the due date (calculated on net cash liability after ITC, per Rule 88B)
- 24% per annum on ITC wrongly availed and utilized
The portal auto-computes interest when you file a delayed GSTR-3B. You'll see the interest amount in the return itself. You cannot file the return without paying this interest.
Common Mistakes When Paying GST
1. Wrong Minor Head
Depositing tax amount under "Interest" or "Penalty" minor head by mistake. The portal won't let you transfer between minor heads. You'll need to claim a refund for the wrong deposit and create a new challan for the correct head. This takes 60+ days.
2. Letting the Challan Expire
A generated challan is valid for 15 days only. If you generate a challan on August 1 and try to pay on August 20, the challan has expired. Generate a new one. No penalty for expiry, but it delays your filing.
3. Ignoring the Cash vs Credit Split
Some businesses deposit their entire liability as cash without checking available ITC. This locks up working capital unnecessarily. Always check your Electronic Credit Ledger balance before creating a challan. Your GSTR-3B return will show the split.
4. Not Matching GSTR-3B Liability Before Payment
If you deposit ₹1,00,000 but your GSTR-3B liability is ₹1,10,000, the return filing will fail. Check your liability computation in the GSTR-3B draft before generating the challan.
Frequently Asked Questions
Can I pay GST without logging into the GST portal?
Yes. Visit gst.gov.in and click Create Challan under the Taxpayers section. Enter your GSTIN and generate a challan in Form GST PMT-06 without logging in. All five payment modes are available in pre-login mode.
What is the maximum amount I can pay via Over the Counter (OTC)?
₹10,000 per challan per tax period. If your liability exceeds ₹10,000, you must use an online mode: net banking, UPI, NEFT/RTGS, or credit/debit card.
How long is a GST challan valid?
15 days from the date of generation (Rule 87(2), CGST Rules 2017). If the challan expires, generate a new one. There is no penalty for an expired challan.
Can I transfer money between minor heads in the Electronic Cash Ledger?
No. Amount deposited under Tax cannot be used for Interest, and vice versa. Each minor head (Tax, Interest, Penalty, Fee, Others) is a separate compartment. If you deposit under the wrong head, you must file a refund application (Form GST RFD-01) and create a new challan.
When does the payment reflect in my Electronic Cash Ledger?
Online payments (net banking, UPI, card) reflect the same day. NEFT/RTGS payments take 2-4 hours. Over the Counter (OTC) payments take T+1 business day.
Can CGST credit be used to pay SGST liability?
No. CGST and SGST credits can never be cross-utilized against each other. This is a fundamental restriction under Section 49A of the CGST Act. CGST credit can only be used for CGST liability or remaining IGST liability. The same applies to SGST credit.
What happens if I pay more GST than my actual liability?
The excess stays in your Electronic Cash Ledger and can be used against future liabilities. Alternatively, you can claim a refund under Section 54 by filing Form GST RFD-01. Refund processing typically takes 60 days.
Is there a convenience fee for paying GST via credit card or UPI?
The GST portal does not charge any fee. However, your bank may charge a convenience fee or processing charge depending on the payment mode and your banking arrangement.
Let Tax Garden Handle Your GST Payments
Getting the challan right, matching minor heads, computing net liability after ITC, tracking due dates across GSTR-1 and GSTR-3B: it adds up. Tax Garden's GST compliance plans handle your complete return filing cycle, from GSTR-1 to GSTR-3B, with accurate liability computation and timely payments every month.
