Electronic cash and credit ledgers

The introduction of electronic ledgers is a unique feature under the GST regime. Electronic ledgers or E- ledgers are of two types. One set is auto-populated upon the action taken by the taxpayer 1. Electronic cash ledger, which gets updated upon payment made by the taxpayer on GST portal and 2. Electronic credit ledger, which gets updated as soon as any input tax credit is claimed or utilized by the tax payer on the GST portal. In this article we are going to discuss both ledgers in detail-

Electronic cash ledger

Electronic cash ledger contains summary of all the deposits/payments made by a taxpayer. Electronic cash ledger is maintained on the GST portal. The electronic cash ledger has to be maintained in prescribed form on the common portal by a person liable to pay tax.

Any deposits made towards payment of tax, interest, penalty, late fee or any other amount will be credited to the electronic cash ledger. Any debit to the electronic cash ledger represents payment therefrom towards tax, interest, penalty, late fee or any other amount.

The deposit in the electronic cash ledger shall be made through any of the following modes, namely-

• Internet banking through authorised banks
• Unified payment interface (UPI) from any bank
• Immediate payment services (IMPS) from any bank
• Credit card or debit card through the authorised bank
• National electronic fund transfer (NEFT) or real time Gross settlement (RTGS) from any bank or
• Over the counter payment through authorized banks for deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft.

It may be noted that the restriction for deposit up to ten thousand rupees per challan in case of an over-the-counter payment will not apply to deposit made by –

1. Government departments or any other deposit to be made by persons as may be notified by the commissioner in this behalf
2. Proper officer or any other officer authorised to recover outstanding dues from any person, whether registered or not, including recovery made through attachment or sale of movable or immovable properties
3. Proper officer or any other officer authorised for the amounts collected by way of the cash, cheque or demand draft during any investigation or enforcement activity or any ad hoc deposit.

Manner of utilisation of amount reflected in electronic cash ledger

The amount reflected in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fee, or any other amount in the prescribed manner. In the e- ledger, information is kept minor head wise i.e., IGST, CGST, SGST /UTGST and CESS. Each major head is divided into five minor heads- Tax, Interest, Penalty, fee and others. A registered taxpayer can make cash deposits in the recognised banks through the prescribed modes to the electronic cash ledger using any of the online or offline mode permitted by the GST portal. The cash deposits can be used for making payments like tax liability, interest, penalties, fees and others.

Transfer of amount reflected in electronic cash ledger

CGST act facilitates a registered person to transfer an amount from one (major/minor) head to another (major/minor) head in the electronic cash ledger or to transfer any amount available in the electronic cash ledger, to the electronic cash ledger for IGST/CGST of a distinct person, provided there is no unpaid liability in his electronic liability register.

The amount available in the electronic cash ledger can be utilised for payment of any liability for the major and minor heads. For instance, if the registered person has made a deposit of tax erroneously i.e., by virtue of human error, under a particular head instead of a specific head, the same can be transferred to the respective intended head vide form GST PMT-09.

Other peculiar aspects of electronic cash ledger

• An unregistered person has to make payment through electronic cash ledger on the basis of temporary identification number through common portal.
• Where the person has claimed refund of any amount from electronic cash ledger, the amount of refund claimed would be debited from the electronic cash ledger.
• Where the refund claimed by a person is rejected either fully or partly, the amount debited earlier shall be credited to the electronic cash ledger by the proper officer to the extent of amount of refund rejected.

Electronic credit ledger

CGST act provides that the self-assessed input tax credit (ITC) by a registered person shall be credited to his electronic credit ledger or electronic input tax credit ledger. This is to be maintained in the prescribed form.

Non-utilisation of ITC for tax liability under reverse charge mechanism-

The amount available in the electronic credit ledger may be used for making any payment towards output tax under CGST, SGST, UTGST or IGST. It is to be noted that ITC available in the electronic credit ledger, cannot be utilised for the tax payable under reverse charge mechanism.

Manner of utilisation of ITC-

1. Available IGST credit in the credit ledger should first be utilised towards payment of IGST. Remaining amount if any, can be utilised towards the payment of CGST, and SGST/UTGST in any order and in any proportion i.e., ITC of IGST can be utilised either against CGST or SGST.
2. Entire ITC of IGST is to be fully utilised first before the ITC of CGST or SGST/UTGST can be utilised.
3. Available CGST credit in the credit ledger shall first be utilised for the payment of CGST. Remaining amount if any, will be utilised for payment of IGST.
4. Available SGST/UTGST credit in the credit ledger shall first be utilised for payment of SGST/UTGST. Remaining amount if any, will be utilised for payment of IGST, only when credit of CGST is not available for payment of IGST.

NOTE-CGST credit cannot be utilised for payment of SGST/UTGST.

Similarly, SGST/UTGST credit cannot be utilized for the payment of CGST.

Conditions of use of amount available in electronic credit ledger

In case of the commissioner or an officer authorised by him in this behalf has reason to believe that ITC available in the electronic credit ledger has been fraudulently availed or is ineligible then he may after recording reasons in writing, prohibit use of ITC for discharge of any liability or for claim of any refund of any unutilised amount.

Restrictions on use of amount available in electronic credit ledger

Rule 86B restricts the amount available in the electronic credit ledger which a registered person can use to discharge his output tax liability to 99% of such tax liability in cases where the value of taxable supply other than exempt supply and zero-rated supply, in a month exceeds rupees 50 lakhs.

Other aspects of electronic credit ledger

• In case of any discrepancy is noticed in the electronic credit ledger, the registered person shall communicate the same to the officer exercising jurisdiction in the matter, through the common portal in the prescribed form.
• No entry shall be made directly in the electronic credit ledger under any circumstances except provided in provisions.

Some Clarifications

1. Whether the amount available in the electronic credit ledger can be used for making payment of any tax under the GST law?

• In terms of section 49, the amount available in the electronic credit ledger may be used for making any payment towards output tax under the CGST act or the IGST act. Output tax in relation to a taxable person, is the tax chargeable on taxable supply of goods or services or both but excludes tax payable on reverse charge mechanism.

1. Whether the amount available in the electronic credit ledger can be used for making payment of any liability other than tax under the GST law?

• The electronic credit ledger can be used for making payment of output tax only under CGST act or the IGST act. It cannot be used for making payment of any interest, penalty, fees or any other amount payable under the said acts. Similarly, electronic credit ledger cannot be used for the payment of erroneous refund.

1. Whether the amount available in the electronic cash ledger can be used for making payment of any liability under the GST law?

• The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of the GST law.

Important sections/rules-