Page 7 - Ch9_POT & TDS-TCS

c Ü Amount entered under any Minor head (Tax, Interest, Penalty, etc.) and Major Head (CGST, IGST,
SGST/UTGST) of the Electronic Cash Ledger can be utilized only for that liability.

Ü Cross-utilization among Major and Minor heads is not possible.
But as per Section 49(10) of 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 the CGST Act to the electronic cash ledger for Integrated tax, Central tax, State tax or

Union territory tax or cess in FORM GST PMT-09, if declaration is given.

CCP 09.04.08.00
Answer the following Questions:
(a) Can one use electronic credit ledger for payment of interest, penalty, and payment under reverse
charge?
(b) Suhasini is a registered software consultant. On account of her ill health, she could not provide any

services during the month of October. However, she had to incur all the expenses relating to her
office. She paid ₹ 75,000 to various vendors. Total GST involved on the goods and services procured
by her is ₹ 13,500. Out of the total bills paid by her, one bill for ₹ 15,000 relates to security services
availed for security of her office, tax on which is payable under reverse charge. GST involved in such

bill is ₹ 2,700
Suhasini is of the opinion that for the month of October, no GST is payable from electronic
cash ledger as she has sufficient balance of ITC for payment of GST under reverse charge on
security services. Do you think Suhasini is right? Explain with reasons assuming provisions of

rule 86B are not applicable. [CA Inter RTP Nov 2020] [Study Mat]
Answer:
Legal Provision:-
Ü As per section 49(4) of the CGST Act, 2017, the amount available in the electronic credit ledger may be used

for making any payment towards 'output tax'.
Ü As per section 2(82) of the CGST Act, 2017, output tax is the tax chargeable on taxable supply of goods
and/or services made by a taxable person or by his agent but
- excludes tax payable by him on reverse charge basis.

Discussion and conclusion:-
(a) Ü Therefore, input tax credit balance available in electronic credit ledger cannot be used for payment of
interest, penalty, and also for payment of tax under reverse charge.

Ü The same is always required to be paid through electronic cash ledger and not electronic credit ledger.
(b) Ü In the given case, input tax credit cannot be used to pay the tax liability under reverse charge.
Ü The same is always required to be paid through electronic cash ledger and not electronic credit ledger.
Ü Thus, Suhasini is wrong and she will need to pay GST of ₹ 2,700 on security service through electronic
cash ledger.

CA VISHAL BHATTAD 09850850800 www.vsmartacademy.com V’Smart Academy 143