Update as on 22nd December 2020
The following are the changes in Rule 36(4) from 1st January 2021:
1. ITC shall be available as per the invoices uploaded by the respective suppliers either in their GSTR-1 or by using the Invoice Furnishing Facility (IFF).
2. The recipients can claim a provisional input tax credit in GSTR-3B to the extent of 5% instead of earlier 10% of the total ITC available in GSTR-2B for the month.
3. Certain taxpayers cannot make GST payment from their electronic credit ledger in excess of 99% of the total tax liability for the tax period as per a new rule 86B.
E-Ledger is an electronic form of passbook for GST. These e-ledgers are available to all GST registrants on the GST Portal.
The e-ledgers contains details of the following:
A. Amount of GST deposited in cash to government in Electronic Cash Ledger
B. Balance of Input Tax Credit available (ITC) in Electronic Credit Ledger
C. Manner of Setoff of GST liability and balance liability (if any) Electronic Liability Ledger
Here is our guide on How to access the e-ledgers on GST Portal.
The balances of these ledgers are also available on ClearTax GST Software
while filing their GST Returns.
A. What is an Electronic Cash Ledger?
This is like an e-wallet. Any GST payment made in cash or through bank reflects in Electronic Cash Ledger.
After deduction of Input Tax Credit (ITC) any balance tax liability has to be paid using balance in Electronic Cash Ledger.
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 balance is his Electronic Cash Ledger 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 Electronic Cash Ledger of Mr.A. The balance of the ledger will be utilised for payment of GST. This payment will reflect in Mr.A’s Electronic Cash Ledger as shown below:
Balance in Electronic Cash Ledger is utilized for payment of GST liability. When offsetting GST liability this is how it reflects on the GST Portal.
|GST on Sales
|Input Tax Credit (ITC)
|GST Liability to be paid
B. What is Electronic Credit Ledger?
All eligible Input Tax Credit that is claimed by a registered dealer in the GST returns (GSTR-2 or GSTR-3B) reflects in Electronic Cash Ledger.
Credit in Electronic Cash Ledger can be used only for payment of tax.
This means that 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 utilizing 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, SGST/UTGST.
- Credit of CGST cannot be utilised for payment of SGST. It can be set-off in the following order – CGST, IGST.
Let’s take the above example. Mr. A has a ITC of Rs 35000. The breakup of ITC is-
- Credit of SGST/UTGST cannot be utilised for payment of CGST. SGST can be set-off in the following order – SGST/UTGST, IGST.
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-
- IGST – Rs. 18,000
- CGST – Rs. 7,000
- SGST – Rs. 10,000
C. What is 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 setoff 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 GST portal.
The balance of e-ledgers can also be imported on ClearTax GST Software
when filing GSTR-3B