Sec 49 – Payment of tax, interest, penalty and other amounts

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Sec 49 – Payment of tax, interest, penalty and other amounts 2017-04-14T14:58:10+00:00

GST India Forum – Goods and Services Tax (GST) in India Forums Bare Law Sec 49 – Payment of tax, interest, penalty and other amounts

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  • Ashish BadalaCA Ashish Badala
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    #1505 |

    (1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed.
    (2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41, to be maintained in such manner as may be prescribed.
    (3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed.
    (4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed.
    (5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of–
    (a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;
    (b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;
    (c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax;
    (d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax;
    (e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and
    (f) the State tax or Union territory tax shall not be utilised towards payment of central tax.
    (6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of section 54.
    (7) All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register in such manner as may be prescribed.
    (8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely:–
    (a) self-assessed tax, and other dues related to returns of previous tax periods;
    (b) self-assessed tax, and other dues related to the return of the current tax period;
    (c) any other amount payable under this Act or the rules made thereunder including the demand determined under section 73 or section 74.
    (9) Every person who has paid the tax on goods or services or both under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods or services or both.
    Explanation.–For the purposes of this section,-
    (a) the date of credit to the account of the Government in the authorised bank shall be deemed to be the date of deposit in the electronic cash ledger;
    (b) the expression,-
    (i) “tax dues” means the tax payable under this Act and does not include interest, fee and penalty; and
    (ii) “other dues” means interest, penalty, fee or any other amount payable under this Act or the rules made thereunder.

    Priya MadrechaPriya Madrecha
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    49.1  Introduction
    This section provides for the following:
    1.    Methodology or mode of payment of tax, interest, penalty, fee or any other amount by a taxable person,
    2.    This Section prescribes three kinds of ledgers to be maintained by the taxable person.
    (a)    Electronic Cash Ledger;
    (b)    Electronic Input Tax Credit Leger or Electronic Credit Ledger; (c)     Electronic Tax Liability Register.
    3.    The Section further provides for availability of credit in the Cash Ledger or the credit ledger depending on the payment made by the taxable person.
    4.    It provides for utilization of credit and also prescribes the method of cross utilization of credit.
    5.    Transfer of input tax credit from UTGST to IGST account when UTGST is utilized for payment of IGST; similar provisions are there in SGST Act also
    In the following analysis, sections referred are generally referred to CGST Act unless otherwise mentioned in specific.
    49.2 Analysis
    A.     ELECTRONIC CASH LEDGER:
    The provisions regarding Electronic Cash Ledger and amounts credited into this ledger are dealt with in sub-Section (1) & (3) of Section 49 of the CGST Act.
    1.    Deposit of Tax, interest, penalty, fee or any other amount by a taxable person can be made by the following modes: –
    —     Internet Banking
    —     Credit /Debit cards
    —     National Electronic Fund Transfer (NEFT)
    —     Real Time Gross Settlement (RTGS)
    — 1Over the Counter payment (OTC) through authorized banks for deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft. This amount restriction is not applicable to remittances by
    •    Government Departments
    •    Proper Officer or any other Officer recovering outstanding dues or during any investigation or enforcement activity or ad hoc deposit — Any Other Mode as may be prescribed.
    2.    The ‘deposit’ made by one of the above mentioned modes will be credited to the Electronic Cash Ledger of the taxable person. This ledger shall be maintained in FORM GST PMT-051
    3.    Any person, or a person on his behalf, shall generate a challan in FORM GST PMT-06 on the Common Portal and enter the details of the amount to be deposited by him towards tax, interest, penalty, fees or any other amount1
    4.    The challan in FORM GST PMT-06 generated at the Common Portal shall be valid for a period of fifteen days1
    5.    Any payment required to be made by a person who is not registered under the Act, shall be made on the basis of a temporary identification number generated through the Common Portal1
    6.    Date of credit into the account of the Government is deemed to be the date of deposit (not the actual date of debit to the account of the taxable person)
    7.    On successful credit of the amount to the concerned government account maintained in the authorised bank, a Challan Identification Number (CIN) will be generated by the collecting Bank and the same shall be indicated in the challan1
    8.    Where the bank account of the person concerned, or the person making the deposit on his behalf, is debited but no Challan Identification Number (CIN) is generated or generated but not communicated to the Common Portal, the said person may represent electronically in FORM GST PMT-07 through the Common Portal to the Bank or electronic gateway through which the deposit was initiated1
    9.    The amount available in the Electronic Cash Ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of the Act or Rules. Manner of utilization, conditions and time limit would be prescribed
    10.    Any amount deducted under section 51 (TDS by Central / State Government or local authority or Government Agencies) or collected under section 52 (TCS by e-commerce operator) and claimed in FORM GSTR-02 by the registered taxable person from whom the said amount was deducted or, as the case may be, collected shall be credited to his electronic cash ledger1
    B.     ELECTRONIC CREDIT LEDGER
    1.    Sub Section (2) of Section 49 of the CGST Act provides that the self-assessed Input Tax Credit as per return filed by a taxable person shall be credited to its Electronic Credit Ledger.
    2.    This ledger shall be maintained in FORM GST PMT-02 for each registered person eligible for input tax credit under the Act on the Common Portal and every claim of input tax credit under the Act shall be credited to the said Ledger1.
    3.    The Electronic credit ledger may include the following:
    —     ITC on inward supplies from registered tax payers.
    —     ITC available based on distribution from input services distributor (ISD).
    — ITC on Input of Stock held/ semi-finished goods or finished goods held in stock on the day immediately preceding the date from which the taxpayer became liable to pay tax Provided he applies for registration within 30 days from the date of his liability.
    — Permissible ITC on inputs held in stock and inputs contained in semi- finished or finished goods held in stock on the day of conversion from composition scheme to regular tax scheme.
    —     ITC eligible on payment made on reverse charge basis      The above list is illustrative and not exhaustive.
    4. A registered person shall, upon noticing any discrepancy in his electronic credit ledger, communicate the same to the officer exercising jurisdiction in the matter, through the Common Portal in FORM GST PMT-041
    COMMON POINTS FOR ELECTRONIC CASH & CREDIT LEDGER
    1.    Where a person has claimed refund of any amount from the electronic cash or credit ledger, the said amount shall be debited to the electronic cash or credit ledger1
    2.    If the refund so claimed is rejected, either fully or partly, the amount debited earlier, to the extent of rejection, shall be credited to the electronic cash or credit ledger by the proper officer by an order made in FORM GST PMT-031
    MANNER OF UTILISATION OF ITC AND CROSS UTILIZATION
    1.    The amount available in the electronic credit ledger may be used for making any payment towards output tax payable under the Act or Rules. The manner of utilization, conditions and time lines would be prescribed.
    2.    The Electronic Credit Ledger has only three Major Heads of Credit:
    Input tax         Output tax
    IGST     IGST
    CGST
    SGST
    CGST     CGST
    IGST
    SGST     SGST
    IGST
    UTGST     UTGST
    IGST
    3.    Hence cross-utilization of credit is available only as above in that order. The main restriction is that the CGST credit cannot be utilized for payment of SGST or UTGST and vice versa
    4.    Sub-Section (6) provides that the balance in the cash or credit ledger after payment of tax, interest, penalty, fee or any other amount may be refunded in accordance with the provisions of section 54 (dealing with refunds)
    5.    A unique identification number shall be generated at the Common Portal for each debit or credit to the electronic cash or credit ledger, as the case may be1. The said UIN must be used to discharge tax liability.
    C.     TAX LIABILITY LEDGER:
    1.    Tax Liability Ledger is required to be maintained electronically for all liabilities of a taxable person in FORM GST PMT-011.
    2.    1This ledger shall be debited by the following amounts (liability is created by debiting)
    — the amount payable towards tax, interest, late fee or any other amount payable as per the return furnished by the said person;
    — the amount of tax, interest, penalty or any other amount payable as determined by a proper officer in pursuance of any proceedings under the Act or as ascertained by the said person;
    — the amount of tax and interest payable as a result of mismatch under section 42 or section 43 or section 50; or
    —     any amount of interest that may accrue from time to time
    3.    1This ledger shall be credited for the following payments (liability is discharged by crediting)
    —     Tax Deducted at Source under section 51
    —     Tax Collected at Source under section 52
    —     Reverse Charge on supply of goods or services under sub- section 3 of section 9
    of CGST /SGST Act, sub-section 3 of section 5 of IGST Act and sub section 3 of
    section 7 of UTGST Act
    —     Tax on supplies from unregistered suppliers under sub section 4 of section 9 of
    CGST/SGST Act, sub section 4 of section 5 of IGST Act and sub section 4 of
    section 7 of UTGST Act
    —     Compounding levy under section 10 of CGST Act
    Order of discharge of tax
    Sub-Section (8) prescribes the chronological order in which the liability of a taxable person must be discharged:
    1.    Self-assessed tax and other dues arising out of returns for previous tax periods must be discharged first.
    2.    Self-assessed tax and other dues relating to the return of the current tax period.
    3.    Any other amount payable under the Act/Rules (liability arising out of demand notice or adjudicated proceedings etc).
    Presumption that incidence of tax is passed on
    Sub-Section (9) of CGST/SGST Act provides that the incidence of tax paid on goods/services is deemed to have been passed to the recipient of such goods and /or services. This is subject to the contrary being proved.
    49.3    Comparative Review
    The Electronic Cash Ledger, Electronic Credit Ledger and Tax Liability Register are unique features of the GST law. This would ensure only eligible credits are availed thereby eliminating the need for Forms such as ‘C’ or ‘F’ or ‘H’ etc.
    On the other hand assessee would be expected to reconcile their financial ledgers with the corresponding Electronic ledgers.
    49.4    FAQ
    Q1. What are the three types of Ledgers to be maintained by a taxable person under the GST Law?
    Ans. The three types of ledgers to be maintained are: Electronic credit ledger, electronic cash ledger and electronic tax liability register.
    Q2.     What are the deposit amounts that need to be reflected in the Electronic Cash Ledger?
    Ans. Electronic Cash Ledger shall contain details of every deposit made towards tax, interest, penalty or any other amount (including the Tax Deducted at Source u/s 51 and Tax Collected at Source u/s 52).
    Q.3     What are the major and minor heads of Credit in the Electronic Cash Ledger? Ans
    Major heads

    Minor Heads
    IGST         Tax
    CGST         Interest
    SGST         Penalty
    UTGST         Any other amount
    Q4. What is meant by Cross-utilization of credit and how is it done in the Electronic Credit Ledger?
    Ans. Cross utilization means utilizing IGST/ CGST/ SGST/ UTGST liabilities against Electronic Credit Ledger under IGST/ CGST/ SGST/ UTGST Act. The amount available in the Electronic Credit ledger may be used for making payment towards output tax payable under the Act or Rules.
    Q5.     Is cross-utilization permissible among Major heads in the Electronic Cash Ledger?
    Ans. Yes, cross-utilization is permissible among major heads in the Electronic Cash Ledger except that CGST credit cannot be utilized for payment of SGST/UTGST and vice versa.
    Q6.     What are the amounts to be reflected in the Electronic Credit Ledger?
    Ans. The input tax credit as self-assessed in the details of inward supplies (Form GSTR-2) of a taxable person shall be reflected in the electronic credit ledger.
    Q7.     Can direct remittances to the Treasury be shown in the Electronic Credit Ledger?
    Ans. No, direct remittances to the Treasury cannot be shown in the electronic credit ledger.
    Q8.     Is there any possibility of refund under the GST Act or is adjustment alone permissible?
    Ans. There is a possibility of refund under GST Act.
    Q9.     What is the order in which tax liability has to be discharged?
    Ans. The order in which the liability of a taxable person must be discharged is as under:
    1.    Self-assessed tax and other dues arising out of returns for previous tax periods must be discharged first.
    2.    Self-assessed tax and other dues relating to the return of the current tax period.
    3.    Any other amount payable under the Act/Rules (liability arising out of demand notice or adjudicated proceedings etc).
    49.5  MCQ
    Q1. Deposits towards tax, penalty, interest, fee or any other amount are credited into the ——————— of a taxable person:
    (a)    Electronic Credit Ledger
    (b)    Tax Liability Ledger
    (c)    Electronic Cash Ledger
    (d)    None of the above
    Ans. (c) Electronic Cash Ledger
    Q2.     The Input Tax Credit as self-assessed by a taxable person is credited into the
    (a)    Electronic Credit Ledger
    (b)    Tax Liability Ledger
    (c)    Electronic Cash Ledger
    (d)    None of the above
    Ans. Electronic Credit Ledger
    Q3. Cross-Utilization of credit of available IGST after utilization towards payment of IGST is done in the following chronological order:
    (a)     CGST then SGST/UTGST (b)     SGST/UTGST then CGST
    (c)    CGST, UTGST and SGST simultaneously
    (d)    None of the Above
    Ans. (a) CGST then SGST//UTGST
    Q4.     Which of the following Statements is true?
    (a)    ITC of CGST is first utilized for payment of CGST and the balance is utilized for payment of SGST/UTGST
    (b)    ITC of SGST is first utilized for payment of SGST and the balance is utilized for payment of CGST
    (c)    ITC of CGST is first utilized for payment of CGST and the balance is utilized for payment of IGST
    (d)    None of the Above
    Ans. (c) ITC of CGST is first utilized for payment of CGST and the balance is utilized for payment of IGST

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