Accounting of Interest, Tax and Other Amounts under GST

All persons registered under GST are allotted a distinctive ID number. For the accounting of interest on GST, GST tax and penalties for anything related to the new tax regime, a different electronic ledger will be maintained. According to the GST law, all deposits that are made towards interest, tax, fees, penalties or any other sum of money deposited by a taxable individual via internet banking or through the use of debit or credit cards or Real Time Gross Settlement or National Electronic Fund Transfer or via any other mode, will be credited to the individual’s electronic cash ledger. The date on which the account is credited with the relevant government in the authorised bank will be considered as the date of deposit.

Working Mechanism of Input Tax Credit of GST in GST Tax Assesse’s Electronic Ledger

In the taxable individual’s return, the input tax credit as self-assessed will be credited to said individual’s electronic credit ledger which will be maintained in the prescribed manner.

What Can the GST Tax Amount Held in the Electronic Cash Ledge Be Used For?

The GST Law states that the sum of money held in the electronic cash ledger can be used for making tax payments, or payments towards penalty, interest, fees or any other sum of money payable under the Act’s provisions.

Utilisation of Input Tax Credit in GST Electronic Credit Ledger

The amount of input tax credit for IGST available in the electronic credit ledger will first be used for payments towards IGST and if there is any money remaining, it can be used to pay first for CGST and then for SGST.

The amount of input tax credit for CGST available in the electronic credit ledger will first be used for payments towards CGST, and if there is any money remaining, it will be used to pay for IGST. The amount of input tax credit for CGST cannot be used for making payments towards IGST.

How to Receive GST Tax Refund?

The amount of money remaining in the credit or cash ledger after interest, fees, penalties and tax have been paid will be refunded to the individuals according to the provisions of Section 38 and the amount collected as SGST/CGST will stand subtracted to that extent.

GST Tax Payers’ Liability

The GST law states that all the liabilities of a taxable individual will be recorded as well as maintained in an electronic register. All taxable individuals will discharge their tax in addition to other dues under the act. The order to discharge tax is as follows:

  1. Self-assessed tax and other dues with regard to returns of previous tax periods.
  2. Self-assessed tax and other dues with regard to return on the current tax period.
  3. Any other amount payable under the Act.

All individuals who have made tax payments on the commodities and/or services under the act are considered to have passed on the full incidence of such tax to the recipient of such commodities and/or services.    

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