Electronic Ledgers in GST

[Ganeshan Kalyani]

The GST due can be paid either through utilization of input tax credit or by cash. The input tax credit is reflected in Electronic Credit Ledger and the payment made by cash is reflected in Electronic Cash Ledger and the GST payable /liabilities are reflected in Electronic Liability Register. In these Electronic Ledgers IGST, CGST, SGST minor heads appear. Interest, penalty, fees etc are to be paid in cash. The liability and input tax credit reflects in the ledger thru GSTR-3B. And the payment made in cash reflects in Electronic Cash Ledger. .

Electronic Liability Ledger: This ledger is maintained electronically by each taxpayer liable to pay tax, interest, penalty, late fee etc. This ledger is debited by the tax payable on outward supply, inward supply liable to reverse charge  thru GSTR-3B. Taxpayer will fill GSTR-3B in GST portal after login with the tax payable and it will accordingly get reflected in electronic liability ledger. The liability on outward supply can be offset again input tax credit reflected in electronic credit ledger. However, tax payable on reverse charge basis cannot be offset against electronic credit ledger. The same has to be paid in cash and which gets reflected in electronic cash ledger. Once liability and the input tax credit is updated in GSTR-3B the taxpayer is triggered to go for offsetting the credit with liability. If the liability is still exist then the system will ask the taxpayer to go ahead with challan generation for paying of tax in cash. Once the payment is made electronic cash ledger is updated and then it will allow to offset the cash against liability. On completion of offset activity the electronic liability ledger gets credited and thus the liability ledger appears NIL indicating all liabilities are paid.

Electronic Credit Ledger: Every taxpayer eligible for input tax credit shall maintain electronic credit ledger on common portal. The eligible input tax credit gets reflects in electronic credit ledger thru GSTR-3B. The taxpayer fill the return online whereby the input tax credit gets reflected in electronic credit ledger. Upon offsetting the credit against GST liability the amount will be debited from this account. If there is no balance in this ledger then taxpayer will have to make payment in cash to offset the liability due.

Electronic Cash Ledger: Once the liability in electronic liability  ledger is offset with the input tax credit available  in electronic credit ledger the taxpayer will be taken to create challan so as to pay the differential tax, if any thru cash. Once payment made from the bank thru challan the amount so paid gets reflected in electronic cash ledger. Initially there was problem in the common portal. The taxpayer experienced that amount got deducted from their account but the same did not get reflected in electronic cash ledger. But now the problem is almost gone.

GSTR-3B: The amount of tax payable, the input tax credit eligible is filled by the taxpayer in GSTR-3B and it gets reflected in respective ledgers. The input tax credit need to be offset against the liability in electronic liability ledger. If all credits gets utilised then taxpayer will pay the balance tax in cash. Thus any ledger to be credited or debited will have to be done thru GSTR-3B. The electronic credit ledger was supposed to be based on GSTR-2A. But since GSTR 2&3 did note did not come into effect the return in GSTR-3B is introduced to fill gap till those return come into effect.

Analysis on the basis of ledgers: The ledgers are available in common portal accessible to taxpayer and government. The amount of tax paid during a particular period, input tax credit availed in that period and cash outflow in paying differential tax is easily available. Taxpayer can analyze the increase in tax payable, credit claimed and cash payable by comparing return of previous periods.