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Electronic Ledgers

Electronic Ledgers in GST

The GST system maintains three electronic ledgers for each taxpayer to track tax payments, credits, and liabilities. These ledgers are automatically generated on the GST portal and help in seamless tax compliance.

1. Electronic Liability Ledger

Meaning

The Electronic Liability Ledger records all the tax liabilities of a taxpayer. It includes:

  • Tax payable on outward supplies.
  • Interest, penalty, late fees, or other dues.
  • Reversed Input Tax Credit (ITC) (if any).

Key Features

  • Auto-populated based on GSTR-3B and other filings.
  • Must be cleared using the Electronic Cash Ledger or Electronic Credit Ledger.
  • If there is an error in tax liability, adjustments can be made in future returns.

How Tax Liability is Paid?

  1. Using Input Tax Credit (ITC) from the Electronic Credit Ledger (for tax payments only).
  2. Using cash payments from the Electronic Cash Ledger (for tax, interest, penalties, or late fees).

2. Electronic Credit Ledger

Meaning

The Electronic Credit Ledger keeps a record of Input Tax Credit (ITC) available to a taxpayer. ITC is the GST paid on purchases that can be used to offset the tax liability on sales.

Key Features

  • ITC is auto-populated from GSTR-2B based on purchases.
  • Can be used only for paying tax liability, not for penalties, interest, or late fees.
  • Separate ITC balances for CGST, SGST, IGST, and UTGST.
  • IGST credit must be used first before CGST or SGST.

Usage Rules

  • IGST credit → Can be used to pay IGST, CGST, or SGST.
  • CGST credit → Can be used to pay CGST or IGST (not SGST).
  • SGST credit → Can be used to pay SGST or IGST (not CGST).

Note: If ITC is wrongly claimed, it must be reversed and repaid through the Electronic Cash Ledger.

3. Electronic Cash Ledger

Meaning

The Electronic Cash Ledger is like a taxpayer’s digital wallet maintained on the GST portal. It records all cash payments made for GST liabilities.

Key Features

  • Used to deposit cash payments for tax, interest, penalty, or late fees.
  • Payments are made via Net Banking, NEFT, RTGS, or Over-the-Counter (OTC) at banks.
  • Can be used to pay any GST liability when ITC is insufficient.
  • Any excess balance in the ledger can be claimed as a refund.

How to Add Funds?

  1. Generate a Challan (GST PMT-06) on the GST portal.
  2. Choose payment mode (Online/NEFT/RTGS/OTC).
  3. Once payment is successful, the amount is credited to the Electronic Cash Ledger.

Summary of Electronic Ledgers

Ledger Purpose Usage
Electronic Liability Ledger Tracks all tax liabilities (Tax, Interest, Penalty, Late Fees) Must be cleared using ITC (Credit Ledger) or Cash (Cash Ledger)
Electronic Credit Ledger Stores Input Tax Credit (ITC) from purchases Can be used only to pay tax liabilities
Electronic Cash Ledger Records cash deposits for GST payments Can be used to pay tax, interest, penalty, or late fees
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