Refund of Excess Balance in Electronic Cash Ledger

Article explains What Is Electronic Cash Ledger, How To Transact In Electronic Cash Ledger, Reason For Excess Balance In Electronic Cash Ledger, How To Claim Refund Of Excess Balance In Electronic Cash Ledger, Manual On GST Refund Of Excess Balance In Electronic Cash Register, Salient Features Of Claiming Refund Of Excess Balance In Electronic Cash Ledger and Transfer Of Amount In Electronics Cash Ledger Through PMT-09.

1. What Is Electronic Cash Ledger

Electronic cash Ledger is like an- wallet. This ledger contains deposits and GST payments made by the taxpayer through cash or Bank.

2. How To Transact In Electronic Cash Ledger

The transaction in Electronic cash Ledger can be explained with an example – A supplier’s GST liability on sale is Rs 40000/- and ITC available on purchases is Rs 25000/- . Assuming that his Electronic Cash Ledger has NIL balance . He will first deposit Rs 15000/- in his Electronic ledger and then discharge total GST liability of Rs 40000/-. (Rs 25000/- from using ITC & Rs 15000/- from Electronic Cash Ledger.

For depositing Rs 15000/- in Electronic cash ledger ,the taxpayer raises a challan in form GST PMT – 06. containing the details of the amount to be deposited towards tax, interest, penalty, fees or any other amount and it is valid for a period of 15 days.

Thus, the taxpayer deposits the tax amount at the common portal after generating the Challan. Once this is done, the collecting bank generates the CIN (Challan Identification Number). This number is indicated on the GST Payment Receipt. Hence, the amount of Rs. 15000/- deposited is credited to the electronic cash ledger of the taxpayer on whose behalf the payment was deposited.

The Electronic cash ledger segregates the deposits information head wise such as IGST, CGST, SGST/UGST and CESS . Each of these major heads (IGST,CGST etc) are further divided into 5 minor heads – Tax, Interest , Penalty, Fees and Others.

3. Reason For Excess Balance In Electronic Cash Ledger

(a) Wrong tax amounts paid by mistake :- Many taxpayers end up paying excess tax due to typing error while making payment thru challans.

(b) Payment under wrong head :- In some cases , tax was paid under wrong head ie CGST paid instead of IGST and vice versa or or Tax paid under interest head or interest paid under penalty Head etc.

As per sec 77 of CGST Act , a registered person who has paid the Central tax and State tax or, as the case may be, the central tax and the Union territory tax on a transaction considered by him to be an intra-State supply , which is subsequently held to be an inter-State supply, shall be refunded the amount of taxes.

(c ) TDS /TCS Deposited under wrong Head : There are instances where taxes deducted / collected is deposited under the wrong head (e.g. an amount deducted as Central tax is deposited as Integrated

tax/State tax), thereby creating excess balance in the cash ledger of the deductor or the collector as the case may be.

It is clarified vide Circular No. 125/44/2019 – GST dated 18th November, 2019 that such excess balance may be claimed by the tax deductor or the collector as the excess balance in electronic cash ledger. In this case, the common portal would debit the amount so claimed as refund.

However, in case where tax deducted or collected in excess is also paid while discharging the liability in FORM GSTR 7 or FORM GSTR 8, as the case may be, and the said amount has been credited to the electronic cash ledger of the deductee, the deductee can adjust the same while discharging his output liability or he can claim refund of the same under the category “refund of excess balance in the electronic cash ledger.

4. How To Claim Refund Of Excess Balance In Electronic Cash Ledger

A facility has been started by the Government on its GST Portal from 29th Nov 2019 under which the taxpayer who paid excess tax by mistake can now transfer the money back to their bank accounts. For the purpose , the tax payer is required to log on GST Portal by using their GSTN registered number and apply for refund of excess paid money.

The refund application on the GSTN portal is available under refund type Tab – ” Refund of Excess Balance in Electronic Cash Ledger.”

5.Manual On GST Refund Of Excess Balance In Electronic Cash Register

(a) Access the https://www.gst.gov.in/ URL. The GST Home page is displayed.

(b) Click the Services > Refunds > Application for Refund command.

(c ) Select the reason as Refund of Excess Balance in Electronic Cash Ledger option.

(d) Click the CREATE button.

(e) The GST RFD-01 A – Excess Balance in Electronic Cash Ledger page / balance amount available in Electronic Cash Ledger is displayed.

(f) Enter the amount of Refund to be claimed for Integrated Tax, Central Tax, State/ UT Tax and Cess in table “Refund Claimed”.

(g) Click the hyper link Click to view Electronic Liability Ledger to view details of Electronic Liability Ledger that displays your liabilities/ dues of Returns and other than Returns.

(h) Click the GO BACK TO REFUND FORM to return to the refund application page.

(i) Select the Account Number from the Select Account Number drop-down list.

(j) Click the SAVE button.

(k) A success message will displayed that “Your application has been saved. You can retrieve this application and submit within 15 days from today. You can access the Application from Services >Refunds > My Saved/Filed Applications and file on the GST Portal.”

(l) Click the PREVIEW button to download the form in PDF format. Form will be downloaded in the PDF format.

(m) Click the PROCEED button.

(n) Select the Declaration checkbox.

(o) In the Name of Authorized Signatory drop-down list, select the name of authorized signatory.

(p) Click the FILE WITH DSC or FILE WITH EVC button.

(q) (i) In Case of DSC:

Click the PROCEED button.

Select the certificate and click the SIGN button.

(ii) In Case of EVC:

Enter the OTP sent to email and mobile number of the Authorized Signatory registered at the GST Portal and click the VERIFY button.

(r) The success message is displayed and status is changed to Submitted.

(s) Application Reference Number (ARN)receipt is downloaded and also sent on your e-mail address and mobile phone number.

(t) Click the PDF to open the receipt.

6. Salient Features Of Claiming Refund Of Excess Balance In Electronic Cash Ledger

(a) The system generates an ARN and displays it in a confirmation message, indicating that the refund application has been successfully filed.

(b) GST Portal sends the ARN to e-mail and SMS of the registered taxpayer.

(c ) GST Portal also makes a Debit entry in the Electronic Cash Ledger for the amount claimed as refund.

(d) Filed applications (ARNs) can be downloaded as PDF documents using the My Saved/Filed Applications option under Refunds.

(e) Filed applications can be tracked using the Track Application Status option under Refunds ,once the ARN is generated after filing of form RFD-01A,

(f) There is no minimum limit restriction for refund of excess amount in Electronic Cash Ledger.

(g) No statement template is available for claiming refund. Claimed details need to be mentioned in the refund application screen while filing application.

(h) The taxpayer can preview the refund application in PDF format to check for any inconsistency or discrepancy before filing on the GST Portal.

(i)  Refund from balance in Electronic cash Register can be made without any  time limit (proviso to section 54(1) of CGST Act) Further , principal of  unjust  enrichment does not applicable as money in Electronic Cash  register is only deposit .

7. Transfer Of Amount In Electronics Cash Ledger Through PMT-09

A new Rule 87(13) has been inserted vide Govt vide Notification 31/2019 dated 28th June, 2019 . As per Rule 87(13) of CGST Rules , 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 Act to the electronic cash ledger for integrated tax, central tax, State tax or Union territory tax or cess in FORM GST PMT-09.”.

The transfer is permitted only in cash ledger and between both major as well as minor heads. The Format of GST PMT-09 has been prescribed The Form is yet to be activated. Once done, a lot of taxpayers will surely be relieved who’s amounts were stuck due to clerical mistakes etc.

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