(1) As per Section 35 “Payment of Tax, Interest, Penalty and other amount” of Chapter IX of GST Model Law, Every deposit made towards tax, interest, penalty, fee or any other amount by a taxable person by Internet Banking, Credit Card/ Debit Card, NEFT/RTGS or any other mode shall be credited to the Electronic Cash Ledger of such person and date of credit shall be deemed to date of deposit.
As per section 2(40), “Electronic Cash Ledger” means the cash ledger in electronic form maintained at the common portal for each registered taxable person.
Amount available in “Electronic Cash Ledger” may be used for any payment towards tax, interest, penalty, fee or any other amount payable under the provision of the Act or rules and within such time as may be prescribed.
(2) The input tax credit as self-assessed in the return of a taxable person shall be credit to “Electronic Credit Ledger” and may be used for making payment towards tax payable under the provision of the Act or rules and within such time as may be prescribed.
As per section 2(58), “Input Tax Credit” means credit of “Input Tax” as defined in section 2(57).
As per section 2(57), “Input Tax” in relation to taxable person means the IGST/CGST/ SGST charged on any supply of goods and/or services to him which are used, or are intended to be used and include tax payable under section 7(3) also {Reverse Charge Mechanism}.
As per section 2(41), “Electronic Credit Ledger” means the Input tax credit ledger in the electronic form maintained at the common portal for each registered taxable person.
(3) Utilisation of Input Tax Credit
(a) Input Tax Credit of IGST shall be utilized in the following order:
− For payment of IGST
− For payment of CGST
− For payment of SGST
(b) Input Tax Credit of CGST shall be utilized in the following order:
− For payment of CGST
− For payment of IGST
− For payment of SGST (Utilisation Not Allowed)
(c) Input Tax Credit of SGST shall be utilized in the following order:
− For payment of SGST
− For payment of IGST
− For payment of CGST (Utilisation Not Allowed)
(4) The balance in Electronic cash or credit ledger after payment of tax, interest, penalty, fee or any other amount or reduction of amount collected as CGST/SGST may be refunded in accordance with the provision of section 38.
(5) Every taxable person shall discharge his tax and other dues in following order:
− Self assessed tax and other dues related return of previous tax periods
− Self assessed tax and other due of current tax period return
− Any other amount including the demand determined u/s 51
For the purpose of this sub-section, tax dues means the tax payable under the act but does not include interest, fee and penalty.
Example:
1. Mr. A made local purchase of Rs. 118000 which include CGST and SGST of Rs. 9000 and Rs. 9000 respectively. He also made interstate purchase of Rs. 50,000 plus Rs. 9000 (IGST). He made interstate sale of all the goods purchased at Rs. 250000 plus Rs. 45000 (IGST) and he paid due tax on due date.
Determine Input tax credit, amount to be shown under Electronic cash ledger or credit ledger.
Sol.
| Particulars | Amount | |
| Sale | 2,50,000 | |
| Add: CGST | 22,500 | |
| Add: SGST | 22,500 | |
|
Total |
2,95,000 | |
Tax Paid: CGST = 22500-9000-9000 = 4500
SGST = 22500-9000 = 13500
Input Tax Credit = 27,000
Amount Credited to Electronic Credit Ledger = 27,000
Amount Credited to Electronic Credit Ledger = 18,000
Note: Input tax of CGST firstly utilized for payment of CGST and then of IGST hence CGST liability only of Rs. 4500 only.
2. Mr. B filed monthly return for the month of May 2017 and claimed excess input tax credit of Rs. 4000. Now he has to file return for the month of June 2017 and his net tax liability determined for current month of Rs. 11000 on 05.07.2017 Rs. 1000 on 06.07.2017. How tax liability would be adjusted with tax liability?
Sol.
| Particulars | May | June |
| Tax Liability | 4,000 | 12,000 |
| Less: Paid on 05.07.2017 | (4,000) | (7,000) |
| Paid on 06.07.2017 | – | (1,000) |
| Balance tax liability to be paid | Nil | 4,000 |
3. Following particulars given below:
| Particulars | CGST | SGST | IGST |
| Input Tax Credit | 12,000 | 12,000 | 10,000 |
| Output Tax Credit | 8,000 | 8,000 | 4,000 |
| Balance Input tax | 4,000 | 4,000 | 6,000 |
How refund will be determined in terms of section 35(6) of GST Act?
Sol.
| Particulars | CGST/CGST | IGST |
| Balance in Credit Ledger to be refunded | 8,000
(4,000+4,000) |
6,000 |
Refund of Rs. 8,000 is determined as per CGST Law and refund of Rs. 6,000 is determined as per IGST Law.
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