TMI Blog2022 (10) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... r IGST Act subject to certain restrictions or conditions that may be prescribed. Sub-rule (2) of Rule 86 of MGST Rules provides for debiting of the Electronic Credit Ledger to the extent of discharge of any liability in accordance with the provisions of Section 49 of the MGST Act - any payment towards output tax, whether self-assessed in the return or payable as a consequence of any proceeding instituted under the MGST Act can be made by utilisation of the amount available in the Electronic Credit Ledger. Hence, a party can pay 10% of the disputed Tax either using the amount available in the Electronic Cash Ledger or the amount available in the Electronic Credit Ledger. Since in the present petitions, the amounts payable are towards output tax, it is held that Petitioners may utilise the amount available in the Electronic Credit Ledger to pay the 10% of Tax in dispute as prescribed under Sub-section (6) of Section 107 of MGST Act. The Appeal is restored to file on the undertaking of Petitioner that it shall debit the Electronic Credit Ledger within one week of this order getting uploaded towards this 10% payable under Section 107(6)(b) - petition disposed off. - WRIT PETITI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, in relation to which the appeal has been filed. (7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed. 49. Payment of tax, interest, penalty and other amounts - (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of it is not accepted. It will not a rise in a situation where the entire order is admitted because the party may then not want to file an Appeal. 5. Clause (b) of Sub-section (6) of Section 107 provides that for such part of the impugned order that is not admitted by the Appellant, the Appellant shall pay a sum equal to 10% of the remaining amount of tax in dispute arising from the said order in relation to which the Appeal has been filed. It is important to note, it does not say anything about interest, fine, fee or penalty . Therefore, when we compare clauses (a) and (b) of Subsection (6) of Section 107, where there is an admission of part of the order and the admission is in relation to tax, interest, fine, fee and penalty, all those amounts will have to be deposited first and, to the part which is not admitted only 10% of the tax in dispute has to be deposited. The deposit will not include the interest, fine, fee and penalty mentioned in the impugned order. By way of illustration, if an impugned order provides:- Tax Rs. 1 Crore, Interest 10%, fine Rs. 2 Lakhs, fee Rs. 50 Thousand, penalty Rs. 5 Lakhs and Appellant is admitting 25% of the amount of tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of ITC available on account of integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards payment of central tax or State tax or as the case may be, even Union territory tax in that order. Clause (b) of Sub-section (5) says the amount of ITC available in the Electronic Credit Ledger on account of the central tax shall first be utilised towards payment of central tax and the amount remaining may be utilised for payment of integrated tax. Clause (c) of Sub-section (5) provides that the amount of ITC available in the Electronic Credit Ledger on account of the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, shall be utilised towards payment of integrated tax. Similarly, clause (d) provides for the utilisation for the Union Territory tax. 8. It is Respondents case that Sub-section (4) of Section 49 restricts the usage of the amount available in the Electronic Credit Ledger only for payment of output tax or under MGST or under IGST and the amount available cannot be utilised for payment of tax under clause (b) of Sub-section (6) of Section 107. 9. We are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r view it will not be necessary to discuss the said order because subsequent to the said order the Central Board of Indirect Taxes and Customs, GST Policy Wing, Department of Revenue, Ministry of Finance, Government of India (CBIT C) has, in exercise of its powers conferred by Section 168(1) of the Central Goods and Services Tax Act, 2017, issued clarification in the form of a circular. This clarification came to be issued in view of various representations that CBIT C received on utilisation of the amounts available in the Electronic Credit Ledger and the Electronic Cash Ledger for payment of tax and other liabilities. The CBIT C, in its circular F. No.CBIC-20001/2/2022-GST dated 6th July 2022 has clarified as under:- Utilisation of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities xxxxxxx 6. Whether the amount available in the electronic credit ledger can be used for making payment of any tax under the GST Laws? 1. In terms of sub-section (4) of section 49 of CGST Act, the amount available in the electronic credit ledger may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nctioned in cash. 8. Whether the amount available in the electronic cash ledger can be used for making payment of any liability under the GST Laws? As per sub-section (3) of Section 49 of the CGST Act, 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 GST Laws. (emphasis supplied) Therefore, CBIT C has itself clarified that any amount towards output tax payable, as a consequence of any proceeding instituted under the provisions of GST Laws, can be paid by utilisation of the amount available in the Electronic Credit Ledger of a registered person. The CBIT C has also requested that suitable trade notices be issued to publicize the contents of the circular. 12. Ms. Chavan, the learned AGP submitted that this clarification will not apply to tax payable on reverse charge mechanism. Mr. Prakash Shah stated that sub-paragraph (5) of paragraph 6 of the circular reproduced in paragraph (11) above above makes it clear that Electronic Credit Ledger cannot be used f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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