7/3/2017 All about E-ledgers under GST: E-cash ledger, E-credit ledger & E-liability ledger.

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/ E-Ledgers under GST: E-Cash Ledger, E-Credit Ledger and E-Liability Ledger

E-Ledgers under GST: E-Cash Ledger, E-Credit Ledger and E-

Liability Ledger
Updated on Jun 09, 2017 - 06:58:14 PM

Last updated on 4th April, 2017

Under GST (https://cleartax.in/gst), the emphasis is on simplifying administrative procedures and bringing transparency in the system. India is moving towards
digitization and the same idea has been captured by lawmakers while drafting the GST bill (https://cleartax.in/s/gst-amendments).

When GST rolls out, each registered taxpayer will get a profile created on the government’s GST website. The taxpayer using the login credentials will be able to
access all features along with a dashboard. All the taxpayers will also get three electronic ledgers namely E-cash Ledger, E-credit Ledger & E-liability Ledger.
These ledgers will reflect the amount of tax payable, input credit balance, and on adding money to the cash ledger the taxpayer will also be able to settle the tax
liability online.

In this article, we will discuss the concept of electronic ledgers and how they are proposed to be used to settle payment liability under GST.

Where tax liability exceeds INR 10,000, it is MANDATORY to pay taxes Online.

There will be three types of electronic ledgers under GST namely E-Cash, E-credit & E-Liability ledger.[/caption]

Types of Electronic Ledgers Under GST

E-Cash Ledger:
This ledger will serve as an electronic wallet. Where, the taxpayer needs to make any payment such as tax, interest, penalty etc and he does not have enough
credit in his E-Credit ledger, he will have to simply add money to the wallet and the money will be utilized to make the payment.

This ledger will basically reflect all the deposit made in cash using various modes.

E-Credit Ledger:
The input tax credit that is self-assessed in the monthly returns will be reflected here under three categories i.e IGST, CGST & SGST. The taxpayer will be able
to utilize the balance shown in this account only for payment of tax as per the credit utilization rules and no other amount such as interest, penalty etc.

Manner of Utilization of Input Credit:

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7/3/2017 All about E-ledgers under GST: E-cash ledger, E-credit ledger & E-liability ledger.

Manner of adjustment of input credit

The E-Credit ledger will show the input credit under the three major tax heads namely IGST, CGST & SGST. As explained in the figure, to pay IGST input credit
can be taken first from IGST, balance can be settled using input from CGST and then SGST and so on. This ledger will help taxpayers determine the status of
amount that can be claimed as input while settling tax liability.

E-Liability Ledger:
This ledger will show the total tax liability of a taxpayer after netting off for the particular month. This ledger will be auto populated.

We will learn about the above three E-ledgers in detail in our next series of articles. Let’s understand on a high level how the registered taxpayers will file their
respective return, make payment using the balance in the E-ledgers and discharge their liabilities through the below illustration.

Let us assume their is a dealer Mr. A who is selling his product on Snapdeal.

Here Mr. A will be supplier and will file GSTR1 i.e where he will provide the details of all his supplies during the month.
The details furnished by Mr. A with respect to sale to Snapdeal will get reflected in form GSTR2A of Snapdeal.
Snapdeal will then use the details in GSTR2A with respect to all the purchases made and file GSTR2. If there is any discrepancy, the two parties will make
the required modifications and Supplier Mr A will be able to ascertain his tax liability on checking the E-ledgers and utilize the credit available or make
payment using E-cash ledger as may be the case.

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7/3/2017 All about E-ledgers under GST: E-cash ledger, E-credit ledger & E-liability ledger.

Mechanism to check the tax liability and make final payment

The concept of E-ledgers will help taxpayers ascertain their tax liabilty , status of input tax credit avaiable, eligible refund amount etc and help them manage their
finances better.

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Use GST Software (https://cleartax.in/gst?ref=content-cta)

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