Transfer of amount in E-Cash Ledger from one head to another under Section 49(10) of CGST Act, 2017

Section 49(10) of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017) was inserted by the Finance Act, 2019 and notified later on w.e.f. 01.01.2020 by Notification No. 01/2020-Central Tax, dated 01.01.2020. this was the most needed and welcome amendment.

As per Section 49(10) of the CGST Act, 2017 “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 this Act, to the electronic cash ledger for integrated tax, central tax, state tax, union territory tax or cess, in such form and manner and subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be a refund from the electronic cash ledger under this Act.”

E-Cash Ledger

Section 49(10) of the CGST Act, 2017 is allowing registered person to transfer of balance in electronic cash ledger from one head to another and it shall be deemed to be refund.

Further, in pursuance of the aforesaid amendment, Rule 87(13) was inserted by Notification No. 31/2019-Central Tax, dated 28.06.2019 and notified later on w.e.f. 21.04.2020 by Notification No. 37/2020-Central Tax, dated 28.04.2020.

“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.”

It is important to note that only amounts available under Electronic Cash Ledger can be transferred to the respective heads using Form GST PMT-09 and not otherwise. For instance: M/s XYZ has availed ITC of Rs. 50,000/- during January under IGST head, instead of availing Rs. 25,000/- under CGST and SGST heads. Mr. Z, accountant of the above company would like to use From GST PMT-09 for making the transfer from IGST head to respective CGST and SGST heads. In this case contention of Mr. Z is not valid for transfer of Rs. 50,000 from head IGST to respective CGST & SGST in Electronic Credit Ledger.

Whether cross-utilisation among major and minor head is possible?

As per Section 49(10) of the CGST Act, 2017 any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under the CGST Act can be transferred to the electronic cash ledger for integrated tax, central tax, state tax, union territory tax or cess, in such form and manner and subject to such conditions and restrictions as may be prescribed. Thus, amount entered under any Minor head (Tax, Interest, Penalty etc.) and Major Head (CGST, IGST, SGST/UTGST) of the Electronic Cash Ledger can be transferred to any other major or minor head. Consequently, cross utilisation among major and minor head is also possible.

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Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.

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