The payment process under the GST system has become relatively easier and convenient. It is possible to keep track of demands raised, payments made, refunds due, etc., on the GST common portal itself. The whole system of payment is executed through 3 electronic ledgers. Let us look at each of them in brief:
In this article, we will also talk about:
The Electronic Cash Ledger keeps track of all payments made towards various types of taxes, interest, late fee, penalty or any other amount payable under GST for related matters. When any amount needs to be paid, it is done by utilising the balance in the Electronic Cash Ledger. The Electronic Cash Ledger is credited with the deposit of money made through the challan and also includes the TDS/TCS claimed under GST.
The Electronic Credit Ledger records all the ITC claimed by the taxpayer on a self-assessment basis through Form GSTR-3B. It also records the ITC distributed to the taxpayer by an Input Service Distributor. The balance in the Electronic Credit Ledger can only be used to make the payment on tax. That means other liabilities like interest, late fee, penalty, etc., can not be paid through this ledger.
This Electronic Liability Register usually reflects the monthly/quarterly tax dues net of ITC for a taxpayer. It will also be debited if the tax department raises any demand. This register is credited with amounts from the Electronic Credit Ledger (towards tax dues only) and Electronic Cash Ledger (for all types of dues).
When payments are under the GST law, the amounts are applied in the following order:
The date on which the tax amount is credited in the State Government/Central Government’s treasury account will be considered as the date of payment of tax (not the date on which the registered person’s account is debited).
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