E-ledgers are like online registers maintained for each registered person. It will reflect the details regarding the GST liability, ITC available, tax liability paid, late fees, and interest.
It is a handy tool provided in the GST system wherein the registered taxpayer can have information about his liabilities and credits at a single location which can be viewed from any place by simply logging into the common portal.
In this article, we have shown the manner of making the GST payment and also explained in detail the electronic cash, credit, and liability e-ledgers.
What is an Electronic Cash Ledger or E-Ledger?
An electronic cash ledger is an account of the taxpayer with the government. It is maintained in form GST PMT-05.
The taxpayer shall create the challan and pay the amount on a self-assessment basis using e-ledgers.
GST on output – ITC = Amount to be paid on the self-assessment basis
The challan should be created for the balance amount to be paid in cash. On making the payment of the challan, the e-ledgers will get updated automatically.
The cash balance in the ledger can be utilized for making payment of GST, interest, penalty, or any other amount required under GST law.
The Manner Of Making Payment Under GST
For making payment of GST liability following steps shall be followed-
- Login to the government website – gst.gov.in and create the challan
One can directly create a challan without login
Services> payment> Create challan - Enter the details of CGST, SGST/ UTGST, IGST, interest, or penalty( if payable). You can also save all the details in the challan and generate it later
- There are 3 modes of payment, on selecting the mode of payment challan will be generated
1st option- E-payment
If you select E-payment, it gives you the option of paying through net banking debit card, or credit card.2nd option is Over the counter payment-
In this option, you can either pay through cash/ demand draft/ cheque but there is a limit for over-the-counter payment i.e. rupees Ten Thousand per challan per tax period
3rd option NEFT/RTGS
Here in this option, you can select your bank from the drop-down list and then make a payment through NEFT/RTGS - After updating the above details, the challan will be generated (in form GST PMT-06 ) and on completing the payment process, you can find the details of all transactions in the Challan History tab.
- When the above payment is successfully made electronic cash ledger will be updated immediately.
CIN and CPIN
All challans or e-ledgers generated will have a 14-digit unique Common Portal Identification Number (CPIN). This CPIN shall remain valid for 15 days from the date of generation. This means that challan once generated remains valid for 15 days.
The bank will generate CIN on the successful credit of the GST amount in the bank account of the government and the same will be indicated on the invoice.
The collecting bank (i.e. the bank account of the government) will inform the common portal regarding the receipt of the GST amount and the same will be reflected in the electronic cash ledger or the e-ledgers of the taxpayer.
If the CIN is not electronically generated but the bank account of the taxpayer has been debited( reduced) or CIN is generated but not communicated to the common portal( GST filling site) then he shall furnish the form GST PMT-07 through the common portal or electronic gateway. The common portal will forward the complaint to the concerned bank. Then the bank will take appropriate action for the generation or communication of CIN.
CPIN stands for Common Portal Identification Number whereas CIN stands for Challan Identification Number. The 14-digit CPIN number is generated before payment of GST and the 17-digit CIN number is issued after payment of GST.
Refund from electronic cash ledger-
Refunds from the cash ledger can only be claimed only when all the return-related liabilities for that tax period have been discharged. A registered person can claim the refund through monthly return forms GSTR-3, GSTR-4(composition dealer), GSTR-5(non-resident taxable person), etc.
If the refund claim gets rejected then the amount debited will be re-credited to the electronic cash ledger or the e-ledgers.
6 Important points to be kept in mind while making the payment
- One should note that while making the payment the challan amount shall be filled up manually (it is not auto-populated).
- There is a separate provision mentioned in the law for the casual taxable person and non-resident taxable person, they are required to deposit the GST liability while taking the registration.
- If the non-registered person is required to make any payment under GST law, it shall be made by creating a temporary identification number on the GST filing website.
- TDS and TCS deducted can be claimed by the recipient by showing it in return form GSTR-2. Such an amount will be credited into the electronic cash ledger.
- GST return cannot be filed unless GST liability along with interest and late fees(if any) is paid
- There is an order for discharging the GST liability –
1st – Self-assessed tax, and other dues related to returns of previous tax periods;
2nd- Self-assessed tax, and other dues related to the return of the current tax period;
3rd- Any amount payable under the order issued by the proper officer.
Electronic Credit e-Ledgers
- All the eligible ITC claimed by the taxpayer in the return forms GSTR-2 and GSTR-3 will be reflected in the electronic credit ledger.
The balance in the electronic credit ledger can be utilized for making payment of GST liability only, which means we cannot use the ledger balance for making payment of interest and penalty. - This ledger is maintained in form GST PMT-02 and it includes the following:-
- ITC on the purchase of goods or service
- ITC received from the ISD
- ITC on the input of stock held/semi-finished goods or finished goods held in stock on the day immediately preceding the date on which the taxpayer became liable to pay tax, provided he applies for registration within 30 days of becoming liable.
- ITC is eligible for a payment made on a reverse charge basis.
- Permissible ITC on inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day of conversion from the composition scheme to the regular tax scheme
- Credit to electronic credit ledger or e-ledgers means the availability of ITC and debit means the use of ITC.
- The registered person under GST can take the unutilized CENVAT credit amount shown under earlier tax laws but only if the following conditions are satisfied
-The registered person should have filed all the returns under existing laws from January 2017 to June 2017 and
-The amount of credit does not relate to goods that are manufactured and cleared under the exemption list.
– For capital goods, there is an additional condition –
Under earlier laws, only 50% of credit was allowed to be availed in the year of purchase and the remaining 50% in the next year. Hence under GST, only the 50% unavailed credit can be utilized. - A registered person shall, upon noticing any discrepancy in his electronic credit ledger, communicate the same to the officer exercising jurisdiction in the matter, through the Common Portal in FORM GST PMT-04.
- Electronic credit ledger cannot be used for making payments of –
Interest and penalty
Payment under reverse charge
Refund of unutilized ITC –
Refund of unutilized ITC amount available in Electronic Credit Ledger shall be allowed ONLY in the following cases:
- Credit is availed on inputs which are utilized for zero-rated supplies without payment of tax
- Credit is accumulation on account of an inverted duty structure
example of inverted duty structure – if the sale of goods attracts 10% GST but the input goods attract 15% GST then the balance of input tax credit will be refunded. But it must be noted that the government has notified certain services and goods on which refund cannot be claimed under the inverted duty structure.
Refund of ITC in case of corporate restructuring-
In case of transfer of the business(like sale, merger, demerger, or amalgamation) the transferor can either transfer the ITC to the transferee or claim the refund of the balance amount.
Electronic liability ledger
This ledger is maintained in the form GST PMT-01. It contains the details regarding the tax, interest, penalty, late fees, or any other payment
Debit and credit entries in electronic liability ledger
The electronic liability ledger is debited by
- Tax, interest, penalty, late fees, or any other amount payable as furnished by the taxpayer in his return.
- Amount of tax, interest, and penalty determined by the GST officer
- Amount of tax and interest due to mismatch of entry (an example of mismatch entry- is when the GSTR-1 filed by the supplier does not match with GSTR-2 filed by the recipient and the mismatch is due to the excess ITC claimed by the recipient, the extra ITC claimed will be added to the tax liability of the recipient and he will be required to tax along with the interest.)
- TDS and TCS amount
- The amount payable on the reverse charge
- The amount payable by the composition dealer
We could say that the electronic liability ledger is auto-populated on the filing of GST returns or mismatches or demands raised by the department. The electronic liability ledger is credited when the above amount is paid.
On making the payment entry will be
Electronic credit/cash ledger A/c Dr
To Electronic liability ledger A/c
Details of Electronic Liability e-Ledgers
The electronic liability e-ledgers register is divided into two parts-
- Part 1- All the liabilities accruing from the return and their payment made will be recorded in this part
- Part 2- This part will have the following information-
-Liabilities due to reduction or enhancement in the amount payable due to the decision of appeal, rectification, revision, review, etc.
-Refund of pre-deposit that can be claimed for a particular demand ID if the appeal is allowed
-Payment made against the show cause notice or any other payment made voluntarily
-Reduction in the amount of penalty (which would be automatically shown) based on payment made after show cause notice or within the time specified in the act or the rules
A unique identification number will be generated at the common portal for each debit or credit to the electronic cash or credit ledger. The unique identification number relating to the discharge of any liability will be indicated in the corresponding entry in the electronic liability register. In case of any discrepancy in his electronic liability ledger, electronic cash ledger, or electronic credit ledger the registered person has to communicate the same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04.
Penalties under GST law
Offense | Penalty |
If the taxable person who
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He shall be liable to pay higher of the following two
· A penalty of Rs. 10,000/- or · An amount equivalent to the tax evaded or short collected or collected but not paid to the government
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Any registered person who supplies any goods and/or services on which any tax has not been paid / short-paid / erroneously refunded or where the input tax credit has been wrongly availed/utilized.
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Conclusion
In essence, the realm of GST payments relies on the meticulous management of electronic cash, credit, and liability e-ledgers. These essential tools provide a consolidated and universally accessible overview of liabilities and credits. The various payment methods, including e-payment and NEFT/RTGS, ensure a seamless path to compliance. Transparent transaction tracking is facilitated through the unique identifiers CIN and CPIN, enhancing clarity in financial processes. Refunds from the e-ledgers, particularly the electronic cash ledger, adhere to specific conditions. The electronic credit e-ledgers play a pivotal role in the strategic management of Input Tax Credits (ITC). Strict adherence to GST payment procedures is imperative to sidestep penalties outlined by GST law, underscoring the paramount importance of accurate e-ledger management and overall compliance.
Also Read:
What Is A Ledger In Accounting?
All You Need To Know About Tax Payments Under GST
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