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Payment of tax
✓ Output tax in relation to a taxable person, means the tax chargeable under this act 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.
✓ E-Ledgers/Register
➢ Electronic Cash Ledger
• It will reflect all deposits made in cash, and TDS/TCS made on account of the tax payer.
• This ledger can be used for making ANY PAYMENT towards tax, interest, penalty, fees or
any other amount on account of GST.
➢ Electronic Credit Ledger
• It will reflect input Tax Credit as self-assessed in monthly returns and credited on
Provisional basis.
• The credit in this ledger can be used to make payment of ONLY TAX i.e. output tax and
not other amounts such as interest, penalty, fees etc.
➢ Electronic Liability Register
• Electronic Liability Register will reflect the total tax liability of a taxpayer (after netting)
for the particular month.
✓ Non applicability of over the counter payment limit on deposits to be made by:
➢ By government departments or any other deposits made by the persons notified by the
commissioner;
➢ Proper officer or any other officer authorized to recover outstanding dues from any person,
whether registered or not, including the recovery made through attachment or sale of
movable or immovable properties;
➢ Proper officer or any other officer authorized for the amounts collected by way of cash, cheque
or demand draft during any investigation or enforcement activity or any ad hoc deposit.
✓ Three kinds of ledgers/registers required to be maintained by the taxable person:
➢ Electronic cash ledger
➢ Electronic credit ledger
➢ Electronic liability register
✓ Electronic cash ledger is an account where records of deposits or receipts and its utilization
towards liabilities are maintained. A taxable person is allowed to deposit any amount towards tax,
interest, penalty, fee or any other amount by a person which shall be credited to the electronic
cash ledger of such person to be maintained in such manner as may be prescribed.
✓ Prescribed mode of depositing amount in electronic cash ledger:
➢ Internet banking through authorized dealer;
➢ Credit or debit card through authorized bank;
➢ NEFT or RTGS from any bank; or
➢ 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.
✓ E-Ledgers/Register
➢ Electronic Cash Ledger
• It will reflect all deposits made in cash, and TDS/TCS made on account of the tax payer.
• This ledger can be used for making ANY PAYMENT towards tax, interest, penalty, fees or
any other amount on account of GST.
➢ Electronic Credit Leger
• It will reflect Input Tax Credit as self-assessed in monthly returns and credited on
Provisional basis.
• The credit in this ledger can be used to make payment of ONLY TAX i.e. output tax and
not other amounts such as interest, penalty, fees etc.
➢ Electronic Liability Register
• Electronic Liability Register will reflect the total tax liability of a taxpayer (after netting)
for the particular month.
✓ Important definitions
➢ CPIN stands for Common Portal Identification Number. It is created for every Challan
successfully generated by the taxpayer. It is a 14-digit unique number to identify the challan.
CPIN remains valid for a period of 15 days.
➢ CIN or Challan Identification Number is generated by the banks, once payment in lieu of a
generated Challan is successful. It is a 17-digit number that is 14-digit CPIN plus 3-digit Bank
Code.
➢ BRN or Bank Reference Number is the transaction number given by the bank for a payment
against a Challan.
➢ E-FPB stands for Electronic Focal Point Branch. These are branches of authorized banks
which are authorized to collect payment of GST. Each authorized bank will nominate only one
branch as its E-FPB for PAN India transaction.
✓ Special Points
➢ Single challan is prescribed for all the payments required to be made under the GST regime.
➢ When amount is successfully credited in the government account, a CIN will be generated by
the collecting bank which will be indicated in the challan.
➢ On receipt of CIN, the amount is credited to electronic cash ledger. If CIN is not generated and
it has not been reflected in the common portal, one can make a representation in Form GST
PMT 07.
➢ Date of deposit of tax dues is the date of credit of the amount in the account of government by
debit of electronic cash ledger/electronic credit ledger and not the date of presentation of
cheque or date of payment.
✓ Main features of GST payment process are
➢ Electronically generated challan from GSTN common portal in all modes of payment and no
use of manually prepared challan;
➢ Facilitation for the tax payer by providing hassle free, anytime, anywhere mode of payment of
tax;
➢ Convenience of making payment online;
➢ Real-time data for tax collection in electronic format;
➢ Faster remittance of tax revenue to the Government Account;
➢ Paperless transactions;
➢ Speedy Accounting and reporting;
➢ Electronic reconciliation of all receipts;

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➢ Simplified procedure for banks; ✓ The manner of utilization the same is prescribed below:
➢ Warehousing of Digital Challan. ➢ IGST credit first may be utilized against the payment of IGST and the balance remaining
can be utilized against the payment of CGST and SGST/UTGST in any proportion.
✓ Major Heads ➢ CGST credit first may be utilized against the payment of CGST and the balance remaining
➢ IGST can be utilized against the payment of IGST.
➢ CGST ➢ SGST/UTGST credit first may be utilized against the payment of SGST/UTGST and the
➢ SGST/UTGST balance remaining can be utilized against the payment of IGST.
➢ CESS ✓ Entire ITC of IGST is to be fully utilized first before the ITC of CGST or SGST/UTGST can be
✓ Minor Heads utilized.
➢ Tax ✓ CGST credit cannot be utilized against the payment of SGST/UTGST. Similarly, the
➢ Interest SGST/UTGST credit cannot be utilized against the payment of CGST.
➢ Penalty ✓ If ITC available in the electronic credit ledger has been fraudulently availed or is ineligible, the
➢ Fee commissioner in that case may prohibit use of ITC for discharge of any liability or for claim of
➢ Others refund of any unutilized amount.
✓ A registered person shall not use the amount available in electronic credit ledger to discharge
✓ IGST, CGST, SGST/UTGST, Cess are examples of major heads. Each of these major heads have the his liability towards output tax in excess of 99% of such tax liability, in cases where the value
five minor heads which are: of taxable supply other than exempt supply and zero-rated supply, in a month exceeds fifty
➢ Tax lakh rupees.
➢ Interest ✓ Refund of any amount claimed from electronic cash/credit ledger by a person would be
➢ Penalty debited from the electronic cash/credit ledger.
➢ Fee ✓ Where the refund claim is rejected either full or partly, the amount debited earlier shall be
➢ Others credited to electronic cash/credit ledger by the proper officer to the extent of amount rejected.
✓ IGST credit used towards the payment of CGST/SGST/UTGST, an amount equivalent to ITC so
✓ Form GST PMT-09 may be used by the taxable person either for: used is transferred by CG from IGST account to CGST/SGST/UTGST account. Same treatment
➢ Transfer of erroneous deposits under any minor head of a major head to any other minor head will be applicable in case of CGST/UTGST/SGST credit used towards the payment of IGST.
of same or other major heads or
➢ For any amounts already lying unutilized under any of the minor heads in electronic cash ✓ Electronic Liability Register
ledger. ➢ Electronic liability ledger will reflect the total tax liability of a tax payer for a particular tax
period.
✓ Electronic Credit Ledger & Its utilization ➢ Following amounts will be debited to electronic liability register:
➢ Electronic credit ledger reflects the self-assessed input tax credit which may be used for • All amounts payable towards tax, interest, late fee and any other amount as per return
making any payment towards output tax. filed;
➢ The taxable person is allowed to use input tax credit available in the electronic credit ledger. • All amounts payable towards tax, interest, penalty and any other amount determined in a
➢ The credit available in electronic credit ledger can be used towards payment of tax only and proceeding by an Assessing authority or as ascertained by the taxable person;
not against other amounts such as interest, penalty, fees etc. • The amount of tax and interest payable.
➢ Payment through electronic cash ledger can be made by an unregistered person on the basis • Any interest amount that may accrue from time or time.
of temporary identification number generated through common portal. ➢ Order of discharge of liability of taxable person:
• All dues related to previous tax period
B) Electronic credit ledger • All dues related to current tax period
Order of utilization of input tax credit available in electronic credit ledger • All due determined under section 73 and 74
ITC Order of utilization
(1) (2) Note:
IGST IGST CGST/SGST/UTGST-any proportion ➢ All liabilities accruing, other than return related liabilities, will be recorded in this ledger.
ITC of IGST to be completely exhausted mandatorily Complete description of the transaction to be recorded accordingly.
CSGST CGST IGST ➢ All payments made out of cash or credit ledger against the liabilities would be recorded
ITC of CGST has been utilized fully before utilizing SGST for payment of IGST accordingly.
SGST/UTGST SGST/UTGST IGST ➢ Reduction or enhancement in the amount payable due to decision of of appeal,
The CGST credit cannot be utilized for payment of SGST/UTGST. The SGST/UTGST credit cannot rectification, revision, review etc. will be reflected here.
be utilized for payment of CGST.

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➢ Negative balance can occur for a single Demand ID also if appeal is allowed/partly
allowed. Overall closing balance may still be positive. iv) The registered person claiming the credit is found to be non-existent or is found not to
➢ Refund of pre-deposit can be claimed for a particular demand ID if appeal is allowed even be conducting any business from the place declared in registration.
though the overall balance may still be positive subject to the adjustment of the refund v) The credit is availed by the registered person without having any invoice or debit note
against any liability by the proper officer. or any other valid document for it.
➢ The closing balance in this part shall not have any effect on filling of return.
➢ Reduction in amount of penalty would be automatic, based on payment made after show
cause notice or within the time specified in the Act or the rules.
➢ Payment made against the show cause notice or any other payment made voluntarily shall
be shown in the register at the time of making payment through credit or cash ledger.
Debit and credit entry will be created simultaneously.

✓ Interest on delayed payment of tax

• A registered person is required to pay interest in case of delay in payment of tax, in full or in
part within the prescribed period.
• Rate of interest is 18%.
• The interest is payable for the period beginning from the date following the due date of
payment to actual date of payment of tax.
• Interest payable will be debited to the electronic liability register.
• Interest can be paid voluntary.
• Interest liability can be adjusted with the balance in electronic cash ledger but not with
balance in electronic credit ledger.
• A taxable person who makes an undue or excess claim of input tax credit or undue or excess
reduction in output tax liability, shall pay interest on such undue or excess claim or on such
undue or excess reduction, as the case may be, at such rate not exceeding 24%, as may be
notified by the government on the recommendation of the council.

Guidelines for disallowing debit of electronic credit ledger under rule 86A
Rule 86A provides that in certain specified circumstances, Commissioner or an officer
authorised by him, not below the rank of Assistant Commissioner, on the basis of
reasonable belief that ITC available in the electronic credit ledger has been fraudulently
availed or is ineligible, may not allow debit of an amount equivalent to such credit in
electronic credit ledger. CBIC has issued guidelines for disallowing debit of said amount
from electronic credit ledger under rule 86A.
On perusal of rule 86A, it is evident that Commissioner, or an officer authorised by him,
not below the rank of Assistant Commissioner, must have "reasons to believe" that ITC
available in the electronic credit ledger is either ineligible or has been fraudulently availed
by the registered person, before disallowing the debit of amount from electronic credit
ledger of the said registered person under rule 86A.
The reasons for such belief must be based on one or more following grounds:
i) The credit is availed by the registered person on the invoices or debit notes issued by a
supplier, who is found to be non-existent or is found not to be conducting any business
from the place declared in registration.
ii) The credit is availed by the registered person on invoices or debit notes, without actually receiving
any goods or services or both.

iii) The credit is availed by the registered person on invoices or debit notes, the tax in
respect of which has not been paid to the Government.

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