written by Khatabook | September 13, 2021

Different Types of E-Ledgers under GST

What is an electronic cash ledger or e-ledger in Goods and Services Tax (GST)? The e-Ledger can be called the GST ledger's electronic passbook and is available to all registered taxpayers on the GST portal. These e-ledgers have the following details.

  • The GST amounts that are remitted to the government in cash are recorded by the electronic cash ledger.
  • The Input tax credits or ITC and the balance of the ITCs or blocked credits are recorded in the electronic credit ledger in GST.
  • The balance of GST liability and the setoff manner of such liabilities are recorded in the electronic liability ledger.

Let us now take a look at what these e-ledgers are.

What is an electronic cash ledger?

The electronic cash ledger is an e-wallet or electronic passbook found on the GST portal, which displays the total amount deposited in cash by the taxpayer to the government. It consists of tax liability, penalties, interest accrued, late fees, and other cash deposits. The recent rules of the Central Goods and Services Tax (CGST) Act of 2017 make it mandatory to deposit any amount towards GST exceeding Rs 10,000 electronically only using PMT-06 for GST payments on the portal.

Form PMT-09 is an important form recently introduced which registered GST taxpayers use to transfer the penalty, interest, or the GST tax amounts from the electronic credit ledger and cash ledger, to the proper tax heading or Cess head. The 4 account heads relevant to GST or Goods and Services Taxes are:

  • IGST or Integrated GST
  • CGST or Central GST
  • SGST or State GST
  • UGST or Union Territory GST.

What is covered in the format of PMT-09?

The form PMT-09 has the major and minor heads of allocations of the GST tax liabilities. Using this form, the taxpayer can correct allocation errors in the 5 major heads and move the amounts wrongly allocated to the right heads/ subheads provided there is an appropriate balance in the electronic credit ledger under the head the taxpayer wants to allocate from. The format is shown below and needs the  Goods and Services Tax Identification Number  (GSTIN) and table-5 details of amounts to be allocated/transferred. After completing it, you must as the taxpayer verify and digitally sign it or e-verify it using the Digital Signature Certificates (DSC) or Aadhar verification.

What is an Electronic Credit Ledger in GST? 

Let us define what is electronic credit ledger

Taxes are paid in cash or credits called the input tax credit. The electronic credit ledger is the passbook for the GST input taxes paid and recorded on the GST portal. The ITC or input tax credit on each transaction results in the input of values transferred to the electronic credit ledger. Here is a list of ITCs recorded in the electronic cash ledger GST:

  • If the taxpayer applies for GST registration within 30 days of paying GST tax, the stock ITC’s or ITC on-hold for semi-finished/finished goods stock is credited to the electronic credit ledger
  • The Input Service Distributor (ISD) transfers the ITC for the branch as the credit amount is transferred to the electronic credit ledger.
  • Under the composition scheme, the ITC available to the taxpayer on input stocks held as finished/semi-finished goods is transferred to the electronic cash ledger if the taxpayer converts from the composition scheme to the normal taxpayer scheme.
  • All ITCs for business purposes available on goods or services used in the business or ITCs for other purposes are allowed only when the ITC for business purposes is used correctly.
  • Taxes paid under the reverse charge mechanism (RCM) and the ITC available due to it are transferred to the electronic credit ledger.

Thus all GST payments are to be made electronically by using the ITCs in the electronic credit ledger or by filling the form PMT-06 and transferring amounts from the electronic cash ledger.

Also Read: GST Invoice – Learn About GST Invoice Rules And Bill Format

What is an Electronic Liability Ledger in GST?

The electronic liability ledger is the GST electronic passbook that records the taxpayer’s tax liability at any given point of time on the GST portal. Let us consider the below table where the liabilities and credits to the taxpayer are grouped under sub-heads like A, B, C etc.

Particulars

Reference Serial Number

Tax payable amounts

A

Late fee and Interest amounts

B

Tax payable inclusive of interest due to the credit mismatch in provisions U/S 29, 29A or 43C.

C

Amounts due by the taxpayer due to Board directions or due to the proceedings against the taxpayer.

D

TDS

E

TCS

F

Tax under RCM or reverse charge mechanism

G

Amounts payable by the department as a refund, interest on amounts, late fee waived etc., ratified under the GST Act proceedings.

H

Electronic Tax Liability Ledger Balance is equal to

(A B C D)

-E-F-G-H

In other words, the balance in the electronic tax liability ledger is the difference between the tax liabilities owed by the taxpayer and the credits due to the taxpayer. If the amount is positive, the taxpayer has due amounts to the GST authorities or liabilities are greater than credits. Similarly, when negative, it means amounts are to be credited to the taxpayer or credits are more than the tax liabilities.

Tax payment methods:

GST tax payments methods are as below:

  • Regular GST Tax payments can be made by cash or by using the ITCs.
  • Penalties and interest payments must be made in cash, and ITC cannot be set off or adjusted against such payments.

Input Tax Credit (ITC) utilisation:

The ITCs can be utilised to make tax payments as below:

  • IGST ITC payments: After the IGST payment has been made using your IGST ITC credit, you can use the remaining input tax credit to pay your SGST/CGST tax liabilities. 
  • CGST ITC payments: The CGST ITC can only be used to pay the CGST tax liability and not the SGST liability. However, the balance of CGST ITC credit in your account can be used towards the payments of IGST liabilities. 
  • SGST ITC payments: The ITCs credited under the SGST input tax credit may be used to pay the SGST liabilities and not the CGST liabilities. However, the balance credit of SGST ITCs can be used to make payments of any IGST tax liabilities present.
  • All Input Tax Credits of a taxpayer registered under the GST Act and filed using the returns form GSTR-3B, or GSTR-2 will reflect in the Electronic Cash Ledger. 

For example- Mr Raj has a GST on sales of Rs 60,000. He has an ITC on purchases of Rs 45,000. The electronic cash ledger balance shows a Zero or NIL balance.

Particulars 

Amount in Rs

GST on Sales

60,000

Input Tax Credit (ITC)

45,000

GST Liability to be paid

15,000

  • The GST liability exceeds the ITC value by Rs. 15,000, paid in cash through bank payment. 
  • Mr Raj deposits the Rs 15,000 to the GST authorities by bank payment. Now the payment is reflected in the electronic cash ledger of Mr Raj. 
  • The ledger balance of the ITC amount has thus been used to make the GST payment to the tune of Rs 45,000. 
  • The Electronic Cash Ledger entries of Mr Raj will reflect the Rs 15,000 paid as below.

  • Hence th e e-ledger ITC balance in the Electronic Cash Ledger is utilised  towards payments of the GST liabilities. 
  • When offsetting GST liabilities, the portal shows the liabilities offset, assuming Mr Raj made a Rs 50,000/- payment and has Rs 35,000 in ITC credits. 

The screen will now reflect this as below:

 E-ledger extracts and an example:

  • The credit available in the Electronic Cash Ledger in GST may be used to pay the taxpayer’s tax liabilities. 
  • However, it cannot be used to pay liabilities such as late fees, interest, penalty etc. These liabilities have to be paid in cash through a bank challan. 
  • The payment of tax liabilities towards IGST/ CGST/ UGST/ SGST has already been discussed above. Now let’s take the example discussed above of Mr Raj and his electronic cash ledger. 

Mr Raj had a credit of Rs 35,000 with a break-up as follows:

  • IGST ITC is Rs. 18,000, SGST ITC is Rs 10,000, and CGST ITC is Rs 7,000, totalling Rs 35,000. 
  • Offset towards payment of his liability of Rs 50,000 with Rs 15,000 reflecting in the electronic cash ledger as a cash payment made through a bank challan. 
  • Take a look at his electronic credit ledger, which shows the IGST Liability to be Rs 30,000, wherein the IGST ITC of Rs 18,000 is fully adjusted and a balance of Rs 12,000 is to be paid in cash and reflects in the Electronic Cash Ledger
  • The CGST ITC of Rs. 7,000 is set off towards the CGST liability totalling Rs 13000 to the extent of Rs 10,000 with a CGST liability of Rs. 3,000 to be paid in cash. 
  • In the SGST ITC credits, the SGST liability is equal to the SGST ITC available. Hence no SGST liability is present, and Mr Raj does not have to pay any more cash as SGST liability. 
  • These details on how to check GST credit are accurately shown in the extract of the electronic credit ledger as below:

  • On completing the credit offsets, here is how the adjustment entries reflect on the GST Portal.

  • The Electronic Liability Ledger shows all details of the taxpayers GST liabilities. 
  • From this ledger, one can find the total liability, how this liability has been paid, the cash remitted, the ITCs adjusted etc. 
  • In the case discussed above, Mr Raj offsets his liability of Rs 50,000 by using Rs 35,000 in the ITC credits and Rs 15,000 in cash is shown in the GST portal’s Electronic Liability Register below.

Thus, familiarity and a good understanding of the e-ledgers on the GST portal is essential in GST tax payments and compliance. When filing your returns in GSTR-3B online on the GST portal, your accounting software can be used to import the electronic e-ledger credits and liabilities.

Accessing the e-ledger on the GST portal:

Here is our easy step-by-step guide to accessing the portal’s e-ledgers:

Step 1: Go to GST Portal: https://www.gst.gov.in/

Step 2: Login to the GST Portal with valid credentials.

Step 3: Click on Services > Ledgers and click on the Electronic Cash Ledger tab.

Step 4: After the Electronic Cash Ledger page is displayed, it will display the Cash Balance as on date. 

Step 5: Next, click on Electronic Cash Ledger.

Step 6: To select the period for which you want to view the Electronic Cash Ledger, select the From and To dates using the calendar. Click on Go. Your Electronic Cash Ledger details will be displayed after this.

Step 7: You can save it in PDF or Excel format. Click on either the “Save As Pdf or Save As Excel” button to save your Electronic Cash Ledger in the format you want.

Step 8: To view the minor ‘heads’ details, click on the amount displayed under each of the main heads. For example, when you click on SGST, the detail under SGST will appear. 

Remember that the electronic cash ledger in GST shows details of the taxpayer’s payments in cash as segregated amounts towards SGST/CGST/IGST/UGST and Cess. These 5 major heads have the following subheads: 

  • Tax
  • Penalty
  • Fees
  • Interest
  • Others

Here are the latest updates on Budget 2021 issued on Feb 1st 2021. U/S 16 of the GST Act, taxpayers can claim ITC based both on GSTR-2A and 2B. The debit note or invoice ITC can only be claimed when the same invoice is furnished by the supplier mentioned as an outwards supply of goods or services. The invoice details are communicated to the receiving party.

Also Read: Important Benefits of Registering for Composition Scheme under GST

Conclusion:

We now have a better understanding of the e-ledgers available on the GST portal for registered GST taxpayers. It is easy to think of these as electronic ledgers and wallets with specific restrictions on balance in electronic credit ledger under GST that can be used against which liability and what can be paid for or what cannot be paid for. Typically liabilities like interest, late fees, penalties, etc., cannot be set off against ITCs and need cash payments using a bank challan. And in case you make a mistake in misallocating it, the Form PMT-09 can be used to rectify these errors. Therefore, it is essential to have sound knowledge regarding electronic cash ledger in GST

Follow Khatabook for more useful information related to GST compliances, accounting and business tips. 

FAQs

1. What is the PMT-09 challan for the GST e-ledgers?

Recently the PMT-09 challan was introduced by the Central Boar d of Indirect Taxes and Customs (CBIC) to shift the e ledger ITCs which were wrongly paid. This helps the taxpayers transfer the amounts paid wrongly as a penalty, tax, fees, interest etc., in the electronic cash ledger to appropriate 5 hea ds, namely IGST/SGST/CGST/UGST/Cess. Example: A taxpayer paid the CGST instead of the SGST. They can now use Form PMT-09 to reallocate the wrong credit of CGST and correctly allocate it to SGST. 

2. What are the heads and subheads of an e-ledger?

Remember that an electronic cash ledger of the GST portal shows details of the taxpayer’s payments in cash, credit and the total liabilities as segregated amounts towards SGST/CGST/IGST/UGST and Cess. These 5 major heads have the following subheads: 

  • Tax
  • Penalty
  • Fees
  • Interest
  • Others

3. What details can I find in the Electronic Liability Ledger?

The Electronic Liability Ledger (ELL) shows all details of the taxpayers GST liabilities. From ELL, one can find the total liability, how this liability has been paid, the cash remitted, the ITCs adjusted etc.

4. How do we make GST payments using ITCs?

GST tax payments methods are as below:

  • Regular GST Tax payments can be made by cash or by using the ITCs.
  • Penalties and interest payments must be made in cash, and ITC cannot be set off or adjusted against such payments.
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