49.0 Purpose of Section 49

Question-1 [ICAI-I-Ch9-Q5]

How many types of electronic ledger/register are there?

Question-1A [ICSI-E-D22-84-1]

Which out of the following is not the type of' Ledgers prescribed by the government under CGST Act, 2017:

(A) Electronic Payment Ledger (B) Electronic Cash Ledger; (C) Electronic Liability Ledger; (D) Electronic Credit Ledger

49.1.1 Every deposit towards tax, interest, penalty, fee etc. shall be credited to ECaL in GST PMT-05

Question-1 [ICSI-E-D20-O-97-1]

The -------------------- under Section 49(1) shall be maintained for each person, liable to pay tax, interest, penalty, late fee or any other amount, on the common portal for crediting the amount deposited and debiting the payment there from towards tax, interest, penalty, fee or any other amount.

(A) Electronic Cash Ledger; (B) Electronic Credit Ledger; (C) Electronic Tax Ledger; (D) Electronic Tax Liability Ledger

49.1.3.2 Challan shall be valid for 15 days

Question-1 [ICSI-E-D21-83-1]

Any amount paid by the taxpayer will be reflected in the electronic cash ledger. To initiate a payment, taxpayers should generate a challan online using form ..............., which will be valid for a period of ................. .

(A) GST PMT-06; 15 days (B) GST PMT-07; 30 days (C) GST PMT-08; 45 days (D) GST PMT-09; 60 days

49.1.3.6 CIN shall be generated, On successful credit of amount to the govt account

Question-1 [ICAI-I-M18-O-10(b)(i)-1]

What is CIN?

49.1.5 Amount available in ECaL may be used for making any payment towards tax, interest, penalty, fees etc.

Question-1 [ICSI-E-D20-88-1]

Electronic Cash Ledger as per section 49(1) of the CGST Act, 2017 shall be maintained for each person on the common portal for crediting the amount deposited and for debiting the payments towards -----------

(A) interest; (B) output tax; (C) penalty and fee; (D) all of the above

Question-2 [ICAI-I-N18-11(a)(ii)-3]

Electronic cash ledger balance of Rs.5,000 under the major head of IGST can be utilized for discharging the liability of major head of CGST. [T/F]

Answer

The said statement is False.

Amount available under one major head cannot be utilised for discharging the liability under any other major head.

Question-3 [ICAI-I-M19-7(b)-2]

M/s. Daksha Enterprises has made a cash deposit of Rs.10,000 under minor head 'tax' of major head 'SGST’. It has a liability of Rs.2,000 for minor head "Interest" under the major head "SGST".

State whether M/s. Daksha Enterprises can utilize the amount available for payment of interest.

Answer

The cash available in any minor head of a major head cannot be utilized for any other minor head of the same major head.

Therefore, in the given case, amount of Rs.10,000 available under minor head ‘tax’ of major head ‘SGST’ cannot be utilized for payment of liability of Rs.2,000 under minor head ‘interest’ of the same major head.

Question-4 [ICMAI-I-J19-3(a)-5]

Ms. Poorvisha got registered under the GST law on 12-02-2019. Since she is new to the GST regime, she seeks you advice on the following:

(i) Whether IGST payments can be made online only or can be made offline also;

(ii) Whether manual challans are permitted under GST;

(iii) Validity period of e-challans, and

(iv) Whether cross utilization among Major and Minor heads of the electronic cash ledger permitted.

Answer

Advice to supplier who has newly taken registration:

(i) Section 49(1) of CGST Act, 2017 read with rule 87 of CGST Rules, 2017 provides that the deposit in electronic cash ledger can be made through any of the following modes, namely:-

Internet Banking through authorised banks;

Credit card or Debit card through the authorised bank;

National Electronic Fund Transfer or Real Time Gross Settlement from any bank; or

Over the Counter payment through authorised banks.

Thus, offline mode is also permitted under GST. As per Rule 87 of CGST Rules, 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:

Provided that the restriction for deposit up to ten thousand rupees per challan in case of an Over the Counter payment shall not apply to deposit to be 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 cash, cheque or demand draft during any investigation or enforcement activity or any ad hoc deposit.

(ii) Manual or physical Challans are not allowed under the GST regime. It is mandatory to generate Challans online on the GST Portal.

(iii) E-challan is valid for a period of 15 days.

(iv) Amount entered under any Minor head (Tax, Interest, Penalty, etc.) and Major Head (CGST, IGST, SGST/UTGST) of the Electronic Cash Ledger can be utilized only for that liability.

Cross-utilization among Major and Minor heads is not possible.

Question-4A [ICAI-I-Ch9-Q9]

Sahil is a supplier of taxable goods in Karnataka. He got registered under GST in the month of September, 2020 and wishes to pay his IGST liability for the month. Since he making the GST payment for the first time, he is of the view that he needs to mandatorily have the online banking facility to make payment of GST; offline payment is not permitted under GST. You are required to apprise Sahil regarding the various modes of deposit in the electronic cash ledger. Further, advise him with regard to following issues:

(a) Are manual challans allowed under GST?

(b) What is the validity period of the challan?

(c) Is cross utilization among Major and Minor heads of the electronic cash ledger permitted?

Answer

As per the provisions of CGST Act, 2017 read with relevant rules, the deposit in electronic cash ledger can be made through any of the following modes, namely:-

(i) Internet Banking through authorised banks;

(ii) Credit card or Debit card through the authorised bank;

(iii) National Electronic Fund Transfer or Real Time Gross Settlement from any bank; or

(iv) Over the Counter payment through authorised banks for deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft.

 Thus, offline mode is also permitted under GST subject to specified conditions.

(a) Manual or physical Challans are not allowed under the GST regime. It is mandatory to generate Challans online on the GST Portal.

(b) Challan is valid for a period of 15 days.

(c) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under the CGST Act, 2017 to the electronic cash ledger for integrated tax, central tax, State tax or Union territory tax or cess.

49.1.6 Amount available in ECaL under any head may be transferred to another head through GST PMT-09

Question-1 [ICAI-I-Ch9-Q2]

Mr. A has deposited a sum of Rs.30,000 under minor head of “Interest” column for the major head “IGST”. At the time of filing GSTR-3B for a particular tax period, he noticed that there is no sufficient amount under the minor head ‘Tax’ towards payment of Rs.30,000. When approached with the Jurisdictional Tax officer, Mr. A was guided to deposit the tax amount under proper head of account and claim a refund for the remittance of amount deposited under head ”interest”. Examine the relevant provisions of CGST Act, 2017 towards payment of tax and compliance with the law.

Answer

Provisions of Section 49(10) of CGST Act, 2017 permit a registered person for transferring the amount deposited under any of the minor head i.e. tax, interest, penalty, fees or others to any of the heads under IGST/CGST/SGST/UTGS and make payment of taxes there upon. Accordingly, Mr. A need not deposit the tax amount under head “tax” and claim a refund for the remittance of amount deposited under head ”interest. Rather, using the Form GST PMT09, such amount can be transferred suo-moto on the common portal from “interest” to “tax” head and tax liability be paid.

Question-2 [ICMAI-I-D19-1(c)(v)-1]

A registered person may transfer any amount of tax, interest, penalty or any other amount available in Electronic Cash Ledger to Electronic Cash Ledger for IGST, CGST or UTGST or cess. [T/F]

Question-3 [ICAI-I-N22-7(b)(i)-3]

Pranesh has deposited a sum of Rs.5,000 under the head of ‘Fee’ column of Cess and Rs.4,000 was lying unutilized under the head of ‘Penalty’ column of IGST. Both the deposits were made wrongly instead of depositing under the head of Fee column under SGST.

In the light of the provisions of section 49(10) & 49(11) of the CGST Act, 2017, briefly explain the relevant provisions as how can Pranesh rectify these errors?

Answer

A registered person is allowed to make intra-head or inter-head transfer of amount, as available in electronic cash ledger, using specified form. It can transfer any amount of tax, interest, penalty, fee or others, under one (major or minor) head to another (major or minor) head, as available in the electronic cash ledger.

Therefore, in the given case, amount of Rs.5,000 available under minor head ‘fee’ of major head ‘cess’ and Rs.4,000 available under minor head ‘penalty’ of major head ‘IGST’ can be transferred to minor head ‘fee’ of major head ‘SGST’ using specified form.

Question-4 [ICSI-P-D21-O-5(d)-3]

A registered person who has paid central tax and state tax or UT tax, as the case may be, on a transaction considered by him to be an intra-state supply, but which is subsequently held to be an inter-state supply. Does he adjust the GST amount which is paid by him under wrong head ? Is any interest is liable on the amount of IGST payable?

Answer

Section 77 of the Central Goods and Services Tax Act, 2017

A taxable person who had paid tax in error is entitled to refund only after the discharge of the correct tax due so that the incorrect tax paid due to wrong classification of tax, reflects on the common portal as “paid in excess”. In this case, suo moto adjustment is not permissible.

Further, As per Section 19 of Integrated Goods and Services Tax Act, 2017, No interest is payable on such IGST paid due to payment of CGST, SGST/UTGST on transactions which later was held as interstate.

49.2.1 Self assessed ITC in the return (GSTR-3B) shall be credited to ECrL in GST PMT-02 (Availment of ITC)

Question-1 [ICSI-E-J22-75-1]

The ITC as self-assessed in the return of a registered person shall be credited to :

(A) Electronic Liability Ledger; (B) Electronic Cash Ledger; (C) Electronic Credit Ledger; (D) Electronic Available Ledger

Question-2 [ICMAI-F-J19-1(iii)-2]

In the electronic ledger, the balance in the input tax credit is shown in

(A) Electronic Liability Ledger; (B) Electronic Cash Ledger; (C) Electronic Credit Ledger; (D) Electronic confirmation ledger

49.2.2.1 ITC available in ECrL may be used for making any payment towards only Output tax

Question-1 [ICSI-E-J21-74-1]

The amount available in electronic credit ledger cannot be used for payment of which of the following:

(A) Interest; (B) Penalty; (C) Fees; (D) All of the above

Question-1A [ICSI-E-D22-73-1]

Input Tax credit as credited in Electronic Credit ledger can be utilized for :

(A) Payment of Interest; (B) Payment of late fees; (C) Payment of Taxes; (D) Payment of Interest and payment of late fees both

Question-2 [ICAI-I-N18-12(c)(ii)-3] [Output tax does not include tax payable under RCM]

Ms. Jimmy wants to adjust input tax credit for payment of interest, penalty and payment of tax under reverse charge. Explain whether she can do so.

Answer

The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger which may be used for making any payment towards output tax.

“Output tax” inter alia excludes tax payable on reverse charge basis.

Thus, Ms. Jimmy cannot adjust input tax credit for payment of interest, penalty as also for payment of tax under reverse charge.

Question-2A [ICAI-I-Ch9-Q10]

Suhasini is a registered software consultant. On account of her ill health, she could not provide any services during the month of October. However, she had to incur all the expenses relating to her office. She paid Rs.75,000 to various vendors. The total input tax involved on the goods and services procured by her is Rs.13,500. Out of the total bills paid by her, one bill for Rs.15,000 relates to security services availed for security of her office, tax on which is payable under reverse charge. Input tax involved in such bill is Rs.2,700.

Suhasini is of the opinion that for the month of October, no GST is payable from electronic cash ledger as she has sufficient balance of ITC for payment of GST under reverse charge on security services.

Do you think Suhasini is right? Explain with reasons.

Answer

The amount available in the electronic credit ledger, i.e. ITC may be used for making any payment towards output tax [Section 49(4)]. Output tax in relation to a taxable person, means the tax chargeable on taxable supply of goods or services or both made by him or by his agent but excludes tax payable by him on reverse charge basis [Section 2(82)].

Therefore, ITC cannot be used to pay the tax liability under reverse charge. The same is always required to be paid through electronic cash ledger and not electronic credit ledger. Thus, Suhasini is wrong and she will need to pay the GST of ` 2,700 on security service through electronic cash ledger.

49.2.2.2 Manner and order of utilisation of ITC

Question-1 [ICSI-E-J21-73-1]

Which of the following utilization of input tax credit is not permitted ?

(i) ITC of IGST against CGST

(ii) ITC of SGST against CGST

(iii) ITC or IGST against SGST

(iv) ITC of UTGST against CGST

(v) ITC of CGST against UTGST

(A) (i), (ii) and (iii)

(B) (ii), (iii) and (iv)

(C) (ii), (iv) and (v);

(D) (iii), (iv) and (v)

Question-2 [ICSI-E-D22-91-1]

Which of the following liability cannot be adjusted against input tax credit of UTGST ?

(A) IGST; (B) UTGST; (C) CGST; (D) Both (A) and (C)

Question-3 [ICSI-P-J21-1(d)(i)-1]

CGST Balance of one state can be adjusted to set off CGST Liability of another state. [T/F]

Question-4 [ICSI-E-J21-84-1]

A & Co. has output tax of IGST of Rs.50,000; CGST Rs.60,000 and SGST Rs.90,000. It has input tax credit by way of IGST Rs.90,000, CGST Rs.30,000; SGST Rs.38,000.

How much is the net tax liability/ITC after set off ?

(A) IGST=Nil/CGST=Nil/ SGST= Rs.42,000

(B) IGST=Nil/CGST= Rs.30,000/S GST= Rs.12,000

(C) IGST = Rs.(40,000)/CGST= Rs.30,000/ SGST = Rs.52,000

(D) IGST input = Rs.11,000/CGST= Nil/ SGST = Rs.52,000

Answer

Question-5 [ICMAI-I-J19-4(b)-7]

From the following information provided to you, determine, how would you utilize ITC on account of SGST available in the Electronic Credit Ledger:

Answer

CGST payable for the month of June, 2019 Rs.73,000 (cannot be adjusted against input tax credit on account of SGST)

Question-5A [ICSI-E-D22-85-1]

A dealer has an SGST Credit of Rs.4 Lakh in his ITC ledger for the month of December 2021 and the same month he has CGST output Liability of Rs.3 Lakh. What an amount should be deposited by that dealer to his Electronic cash ledger maintained in GSTN portal to file a valid return?

(A) No deposit is required (B) Rs.4 Lakh (C) Rs.3 Lakh; (D) Rs.1 Lakh

Question-6 [ICAI-I-M22-8b-5]

Mr. B, a registered supplier of Uttar Pradesh, is doing the trading of taxable goods. He approaches you to understand the manner of utilisation of available Input Tax Credit (ITC).

With reference to provisions of payment of tax, state the manner of uilisation of ITC under GST law.

Answer

Refer Section 49(5), 49A, 49B read with Rule 88A, 88B

The manner of utlisation of ITC under GST law is as under:

1. IGST credit should first be utilized towards payment of IGST.

2. Remaining IGST credit, if any, can be utilized towards payment of CGST and SGST/UTGST in any order and in any proportion.

3. Entire ITC of IGST should be fully utilized before utilizing the ITC of CGST or SGST/UTGST.

4. Subsequently, ITC of CGST should be utilized for payment of CGST and IGST in that order.

5. ITC of SGST /UTGST should be utilized for payment of SGST/UTGST and IGST in that order.

6. ITC of SGST/UTGST should be utilized for payment of IGST, only after ITC of CGST has been utilized fully.

7. ITC of SGST/UTGST cannot be utilized for payment of CGST and vice versa

49.2.3.1 ITC already availed in ECrL may not be allowed to be utilised/refunded by Commissioner

Question-1 [ICAI-I-N20-8(a)-5]

Who can impose restrictions on utilization of input tax credit (ITC) available in the electronic credit ledger and under what circumstances can restrictions be imposed under the CGST Rules 2017?

Answer

The Commissioner or an officer (not below the rank of an Assistant Commissioner) authorised by him has been empowered to impose restrictions on utilization of ITC available in the electronic credit ledger. The restrictions can be imposed under the CGST Rules, 2017 in the following circumstances:

(i) ITC has been availed on the basis of tax invoices/valid documents –

• issued by a non-existent supplier or by a person not conducting any business from the registered place of business; or

• without receipt of goods and/or services; or

• the tax in relation to which has not been paid to the Government.

(ii) Registered person availing ITC has been found non-existent or not to be conducting any business from the registered place of business; or

(iii) Registered person availing ITC is not in possession of tax invoice/valid document

Question-2 [ICAI-F-N20-5(a)-5]

M/s Fly-by-Night, tour operators, availed input tax credit in respect of certain transactions where no such supplier was existent or from a person not doing any business from the registered place of business. Jurisdictional Deputy Commissioner of GST wants to restrict the utilization of the credit by M/s Fly-by-Night. You have been approached by M/s Fly-by-Night to give your advice on the following questions raised by it:

(i) Is it possible for the Department to restrict the utilization of credit which is already availed?

(ii) If yes, under what circumstances this can be done by the Department?

Question-2A [ICSI-P-D22-3(c)-4]

Ghumte Raho Ltd, a tour operator, availed input tax credit (ITC) in respect of certain transactions where no such supplier was existent or from a person not doing any business from the registered place of business. Jurisdictional Deputy Commissioner of GST wants to restrict the utilization of the credit by Ghumte Raho Ltd. You have been approached by Ghumte Raho Ltd. to give your advice on the following questions raised by it :

(i) Is it possible for the Department to restrict the utilization of credit which is already availed ?

(ii) If yes, under what circumstances this can be done by the Department ?

49.2.4.2 Non applicability of restriction on utilization of ITC upto 99% of Output Tax

Question-1 [ICAI-I-N22-8(a)-5]

Rule 86B restricts the use of Input Tax Credit (ITC) available in the Electronic Credit Ledger
for discharging output tax liability. List down the exceptions to the rule 86B

Answer

Rule 86B of the CGST Rules, 2017 restricts the use of ITC available in the Electronic Credit Ledger for discharging output tax liability by a registered person. Exceptions to rule 86B are as follows:

(1) Where the said person/proprietor/karta/managing director/any of its two partners, whole-time directors, members of Managing Committee of Associations or Board of Trustees, as the case may be, have paid more than Rs.1 lakh as income tax in each of the last 2 financial years.

(2) Where the registered person has received a refund of more than Rs.1 lakh in the preceding FY on account of unutilised ITC in case of

(i) zero rated supplies made without payment of tax or

(ii) inverted duty structure.

(3) Where the registered person has discharged his liability towards output tax through the electronic cash ledger for an amount which is in excess of 1% of the total output tax liability, applied cumulatively, upto the said month in the current FY.

(4) Where the registered person is Government Department, Public Sector Undertaking, Local authority or Statutory body. Said restriction may be removed by Commissioner/authorised officer after required verifications and safeguards.

49.4.1 All liabilities (tax, intt etc) of a taxable person shall be recorded and maintained in e-liability register in GST PMT-01

Question-1 [ICSI-E-D20-89-1]

Section 49(7) of the CGST Act, 2017 read with Rule-85 mandate and require to maintain the -------------------- in GST form number -------------- for each person liable to pay tax, interest, penalty, late fees or any other amount on the common portal of the department.

(A) Electronic Payment Register; GST-PMT-2

(B) Electronic Liability Register; GST-PMT-1

(C) Electronic Credit Register; GST-PMT-1;

(D) Electronic Tax Register; GST-PMT-2

Question-2 [ICSI-E-D21-81-1]

Electronic Liability Register (ELR) specified in section 49(7) shall be maintained as per Rule 85 in form ................. for each person liable to pay tax, interest, penalty, late fee or any other amount on the .............. and all amounts payable by him shall be debited to the said register.

(A) GST PMT – 01; Common Portal; (B) GST PMT – 06; GST Portal; (C) GST PMT – 01; GST Portal; (D) GST PMT – 05; Common Portal

Question-3 [ICSI-E-D19-88-1]

The Electronic Liability Register specified under section 49(7) of the CGST Act,2017 as per Rule 85 of the CGST Rules 2017 shall be maintained in Form..................... for each person liable to pay tax, penalty, late fees or any other amounts payable by him on the common portal which shall be debited to the said register.

(A) GST PMT-10; (B) GST PMT-01; (C) GST PMT-05; (D) GST PMT-02

49.4.2 Debit of e-liability register [Increase in GST liability]

Question-1 [ICAI-I-M19-O-10(b)-5]

What are the E-ledgers? State the entries to be debited to electronic liability register under the CGST Act, 2017 and the CGST Rules, 2017.

Answer

Electronic Ledgers or E-Ledgers, i.e., Electronic Cash Ledger and Electronic Credit Ledger, are statements of cash and input tax credit in respect of each registered taxpayer. In addition, each taxpayer shall also have an electronic tax liability register.

The entries to be debited to electronic liability register under the CGST Act, 2017 and the CGST Rules, 2017 are as follows:

(i) all amounts payable towards tax, interest, late fee and any other amount as per return filed;

(ii) all amounts payable towards tax, interest, penalty and any other amount determined in a proceeding by an Assessing authority or as ascertained by the taxable person;

(iii) the amount of tax and interest payable due to mismatch;

(iv) any amount of interest that may accrue from time to time.

Question-1A [ICAI-I-N19-8(c)(ii)-3]

State the items which are to be debited· to electronic liability register of the taxable
person under the CGST Act, 2017 and rules thereunder.

Answer

The items to be debited to electronic liability register of the taxable person are as under:-

(a) all amounts payable towards tax, interest, late fee and any other amount as per return filed;

(b) all amounts payable towards tax, interest, penalty and any other amount determined in a proceeding by an Assessing authority or as ascertained by the taxable person;

(c) the amount of tax and interest as a result of mismatch.

(d) any interest amount that may accrue from time to time.

Note: Any three points may be mentioned out of the above mentioned four points.

49.6 Order of discharge of tax and other dues

Question-1 [ICAI-I-N20-8(b)-5]

Explain the order of discharge of tax and other dues as per the provisions of section 49(8) of the CGST Act, 2017.

Answer

The order of discharge of tax and other dues as per provisions of section 49(8) of the CGST Act, 2017 is as under:-

(a) self-assessed tax and other dues related to returns for the previous tax periods should be discharged first.

(b) the self-assessed tax and other dues for the current period should be discharged next

(c) Lastly, any other amount payable including demand determined under section 73 or section 74 should be discharged.

49.7 Presumption that incidence of tax is passed on to the recipient of supply

Question-1 [ICAI-I-Ch9-Q7]

Are principles of unjust enrichment applicable for payment made under GST?

Answer

Yes, as per Section 49(9) of the CGST Act, 2017 every person who has paid the tax on goods or services or both under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods or services or both.