E-Ledgers under GST: Electronic Cash, Credit and Liability Ledger

e-Ledgers are an electronic form of a passbook for GST. These e-ledgers are available to all GST registrants on the GST portal.  The e-ledgers contain details of the following: 

• Amount of GST deposited in cash to the government in the Electronic Cash Ledger (ECL)
• Balance of Input Tax Credit available (ITC) in the electronic credit ledger 
• Manner of setoff of GST liability and balance liability (if any), electronic liability ledger 

Lets understand about each of the three electronic ledgers in detail.

What is an Electronic Cash Ledger?

This is like an e-wallet. Any GST payment made in cash or through a bank reflects in the Electronic Cash Ledger. After deduction of Input Tax Credit (ITC) any balance tax liability has to be paid using balance in ECL. For example- 

• Mr. A has a GST on sales of Rs 50,000. 
• He also has an Input Tax Credit on purchases of Rs 35,000. 
• The current balance of his ECL is Nil.

The GST liability of Rs. 15,000 has to be paid in the form of cash/bank payment. Mr. A will deposit Rs 15,000. This will be shown in the ECL of Mr.A. The balance of the ledger will be utilised for payment of GST. This payment will reflect in Mr.A’s ECL as shown below:

Balance in ECL is utilised for payment of GST liability. When offsetting GST liability this is how it reflects on the GST Portal.

What is an Electronic Credit Ledger?

All eligible ITC that is claimed by a registered dealer in the GST returns (GSTR-2B or GSTR-3B) reflects in the Electronic Credit Ledger. Credit in the Electronic Credit Ledger can be used only for payment of tax. This means that the balance of Electronic Credit Ledger cannot be utilised for payment of interest, penalty or late fees. Interest and penalty can be paid only through actual cash payment. Specific order and restrictions for utilising ITC (IGST, CGST, SGST) for payment of GST liability:

• Credit of IGST can be utilised against all any tax liability in this order – IGST, CGST or SGST/UTGST.
• Credit of CGST cannot be utilised for payment of SGST. It can be set-off in the following order – CGST, IGST.
• Credit of SGST/UTGST cannot be utilised for payment of CGST. SGST can be set-off in the following order – SGST/UTGST, IGST.

 Let’s take the above example. Mr. A has an ITC of Rs 35000. The breakup of ITC is-

• IGST – Rs. 18,000
• CGST – Rs. 7,000
• SGST – Rs. 10,000

The IGST Liability is Rs 30,000. The IGST credit of Rs 18,000 will be entirely used to set off this liability. The balance IGST is paid in cash of Rs 12,000 which reflects in the Electronic Cash Ledger. 

In case of CGST the credit of Rs. 7,000 will be set off against liability of Rs. 10,000 and CGST of Rs. 3,000 has to be paid. The SGST payable is equal to the credit of SGST available. This means no SGST has to be paid by Mr. A.

On offsetting credit here is how the adjustments will reflect on the GST Portal-

What is the Electronic Liability Ledger?

This ledger has details of GST liability. The ledger contains the total GST liability and the manner in which it has been paid – in cash or through credit. In the example stated above the manner in which the GST liability is set off can be seen in the Electronic Liability Register. Here is how the Electronic Liability Ledger looks in the GST Portal-

Basic understanding of these e-ledgers is important. You can access these e-ledgers through the GST portal. 

The balance of e-ledgers can also be imported on Clear GST Software when filing GSTR-3B.

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