Introduction to GST

GST and Customs
GST and Customs
Unit-I: Introduction
Tax Invoice; Credit and Debit Notes; E-Way Bill, Procedure
for Generation of E-Way Bill; Accounts and Records;
Electronic Cash Ledger, Manner of Utilization of Amount in
Electronic Cash Ledger, Electronic Credit Ledger-Manner of
Utilization of ITC, Electronic Liability Ledger-Order of
Unit-I: Introduction
Tax Invoice; Credit and Debit Notes; E-Way Bill, Procedure
for Generation of E-Way Bill; Accounts and Records;
Electronic Cash Ledger, Manner of Utilization of Amount in
Electronic Cash Ledger, Electronic Credit Ledger-Manner of
Discharge of Tax and Other Dues.
Prepared by
Mr. Dayananda Huded M. Com NET, KSET, JRF
Fulltime Guest Faculty,
Rani Channamma University, P G Centre, Jamkhandi
Discharge of Tax and Other Dues.
Prepared by
Mr. Dayananda Huded M. Com NET, KSET, JRF
Fulltime Guest Faculty,
Rani Channamma University, P G Centre, Jamkhandi

Tax Invoice
• An invoice is a commercial instrument issued by a supplier of
goods/services to a recipient.
• It identifies both the parties involved, and lists, describes the
goods sold/services supplied, quantifies the items sold, shows the
date of shipment and mode of transport, prices and discounts, if
any, and the delivery and payment terms (in case of supply of
goods).
goods).
• Invoicing is very crucial aspect for ensuring tax compliance under
any indirect taxation system.
• In order to ensure transparency, issuance of invoice for every
taxable transaction is a pre-requisite. In case of supply of goods or
provision of services, an invoice is raised by the supplier of such
goods or services to the recipient of the same.

Contd.
• Tax invoice acts as a document evidencing the payment of
the value of the goods or services or both as also the tax
portion in the same.
• In certain cases, an invoice serves as a demand for payment
and becomes a document of title when paid in full.
• Under the GST regime, an “invoice” or “tax invoice”
means the tax invoice referred to in section 31 of the CGST
Act, 2017. This section mandates the issuance of an invoice
Act, 2017. This section mandates the issuance of an invoice
or a bill of supply for every supply of goods or services.
• Under GST, a tax invoice is an important document. It not
only evidences supply of goods or services, but is also an
essential document for the recipient to avail Input Tax
Credit (ITC). A registered person cannot avail input tax
credit unless he is in possession of a tax invoice or a debit
note.

Manner of Issuing Invoices
Supply of Goods Supply of Services
Triplicate Copies Duplicate Copies
Original copy for Recipient Original copy for Recipient and
Duplicate copy for Transporter and Duplicate copy for Supplier
Triplicate copy for Supplier
Triplicate copy for Supplier

Types of
Invoices
Tax Invoice
To be issued by Registered
person making supply of
Taxable Goods or Services
Bill of Supply
To be issued by a person
making Exempted supply or
composite dealer
Invoice cum Bill of Supply
To be issued by a person
engaging in making taxable as
well exempted supply
Consolidated Tax Invoice
Invoices Consolidated Tax Invoice
Receipt Voucher
Payment Voucher
Refund Voucher
Delivery Challan
Revised Tax Invoice
A composite vendor is a
vendor whose aggregate
turnover in a financial year
does not exceed fifty lakh
rupees and has opted for
composition scheme. A
composite vendor neither
collects tax from the recipient
of supplies nor passes on any
credit of input tax.

Receipt Voucher
Where at the time of Receipt of Advance rate of tax or nature of
supply is not determinable
Recipient
Advance
Payment
Advance
Payment
Receipt Voucher
Supplier
Refund Voucher
Where at the time of Receipt of Advance
Rate of tax is not determinable Tax shall be paid at the rate of 18%
Nature of supply is not determinable Same shall be treated as Inter-State sale
Supplier Recipient
Advance Payment
Receipt Voucher
Refund Voucher
Sale

• Consolidated Tax Invoice
Consolidated Tax Invoice shall be issued for such supplies at the
close of each day in respect of all such supplies.
Tax Invoice is not required to issue where;
1. Value of Supply is < Rs. 200
2. Recipient is Unregistered
3. Recipient does not require such invoice
3. Recipient does not require such invoice

• Illustration 1: Jain & Sons is a trader dealing in stationery items. It is
registered under GST and has undertaken following sales during the day;
No Tax Invoice required to be issued if value < Rs. 200
A Consolidated Tax Invoice can be issued [Section 31 (3)(b)
Sl. No. Recipient of Supply Amount
1 Raghav Traders – A Registered retail dealer 190
2 Druva Enterprises – An unregistered Trader 358
3 Guarav – A Painter (Unregistered) 500
None of the recipients require a tax invoice [Raghav Traders being a
composition dealer].
– Determine in respect of which of the above supplies, Jain & Sons
may issue a Consolidated Tax Invoice instead of Tax Invoice, at the
end of the day.
3 Guarav – A Painter (Unregistered) 500
4 Oberai Orphanage - An unregistered entity 188
5 Aradya – A Student (Unregistered) 158

• In the given illustration, Jain & Sons can issue a Consolidated Tax
Invoice only with respect to supplies made to Oberoi Orphanage
[worth Rs. 188] and Aaradhya [worth Rs. 158] as the value of
goods supplied to these recipients is less than Rs. 200 as also these
recipients are unregistered and don’t require a tax invoice.
• As regards the supply made to Raghav Traders, although the value
of goods supplied to it is less than Rs. 200, Raghav Traders is
Discussion
of goods supplied to it is less than Rs. 200, Raghav Traders is
registered under GST. So, Consolidated Tax Invoice cannot be
issued.
• Consolidated Tax Invoice can also not be issued for supplies of
goods made to Dhruv Enterprises and Gaurav although both of
them are unregistered. The reason for the same is that the value of
goods supplied is not less than Rs. 200.

Revised Tax Invoice
Effective Date of
Registration
Date of Issuance of
Certificate of Registration
Revised Tax Invoices to be issued in respect of taxable supplies effected during this
period
In Case
Consolidated Revised Tax Invoice (CRTI) may be issued in respect of taxable supplies
made to an Unregistered Recipient during this period
In case of inter-State supplies, CRTI cannot be issued in respect of all unregistered
recipients if the value of supply exceeds Rs. 2,50,000 during this period

• In GST, all invoices issued between the date of implementation of
GST and the date of issuance of GST registration certificate will
have to be reissued in the form of a revised invoice and have to be
raised within a month of issuance of the registration certificate.
• When to issue a revised invoice under GST?
• Under GST, all taxable dealers will have to apply for provisional
registration and carry out all the formalities to get a permanent
registration certificate. After obtaining the GST registration
registration certificate. After obtaining the GST registration
certificate, the taxpayer will need to issue revised invoices for all
the invoices issued between the period of the-
• Date of implementation of GST
• Date of issue of the registration certificate
• The revised invoice will have to be issued within one month from
the date of issue of the registration certificate.

• What are supplementary invoices and their uses?
• A supplementary tax invoice is an invoice that a taxable person issues if any
deficiency is found in a tax invoice already issued by the said taxable person. A
supplementary invoice is also known as a debit note.
• Difference between a revised invoice and a supplementary invoice
Particulars Revised Invoice Supplementary Invoice
Meaning A taxable person may issue a
revised invoice for an invoice
already issued by him before
A taxable person has to issue a
supplementary tax invoice in a
case where any deficiency is
already issued by him before
obtaining GST registration.
case where any deficiency is
found in a tax invoice already
issued by a taxable person.
Period Covered The period beginning from the
effective date of registration until
the issuance of a Certificate of
Registration.
Not based on period but invoice
specific
Issued to whom To registered persons as well as
unregistered persons.
To registered persons as well as
unregistered persons.

Example 2: Lav & Kush Pvt. Ltd. of Meghalaya engaged in the supply of
Gifts items and Repairs services, Provides you the following details
Sl. No. Particulars Date
1 Commencement of the business of supplying goods and services 1st August
2 Turnover Exceeds Rs. 10,00,000 on 15th August
3 Turnover Exceeds Rs. 20,00,000 on 5th September
4 Application for registration made on 28th September
5 Registration certificate granted on 6th October
5 Registration certificate granted on 6 October
The company seeks your advice as to how it should raise revised tax
invoices for supplies made. Is there any specific provision for issuance of
revised tax invoices to unregistered customers? Explain.

Answer:
• A supplier of both goods and services whose aggregate turnover in a
financial year exceeds Rs 20 lakh in a State/UT [Rs 10 lakh in specified
Special Category States] is liable to apply for registration within 30 days
from the date of becoming liable to registration (i.e., the date of crossing the
threshold limit of Rs 20 lakh/ Rs 10 lakh) in terms of section 22. Since
Meghalaya is not a specified Special Category State, applicable threshold
limit is Rs 20 lakh.
• Further, where the application is submitted within said period, the effective
• Further, where the application is submitted within said period, the effective
date of registration is the date on which the person becomes liable to
registration; otherwise it is the date of grant of registration.
• Every registered person who has been granted registration with effect from a
date earlier than the date of issuance of registration certificate to him, may
issue revised tax invoices within 1 month from the date of issuance of
registration certificate in respect of taxable supplies effected during this
period i.e. from the effective date of registration till the date of issuance of
registration.

• Since Luv & Kush Pvt. Ltd. has made the application for registration
within 30 days of becoming liable for registration, the effective date of
registration becomes the date on which the company becomes liable to
registration i.e. 5th September.
• Thus, Luv & Kush Pvt. Ltd. may issue revised tax invoices against the
invoices already issued during the period between effective date of
registration (5th September) and the date of issuance of registration
certificate (6th October), within 1 month from 6th October.
• Further, Luv & Kush Pvt. Ltd may issue a consolidated revised tax
invoice in respect of all taxable supplies made to unregistered dealers
during such period. However, in case of inter-State supplies made to
unregistered dealers, a consolidated revised tax invoice cannot be issued
in respect of all the recipients located in a State, if the value of a supply
exceeds Rs 2,50,000.

Consolidated Revised Tax Invoice
Supply 1
Supply 2
Mr. A
Registered
Supplier
Mr. B
Unregistered
Recipient
Supply 3
Supply 4
Consolidated
Revised Tax
Invoice

Bill of Supply
• To be issued by a person making Exempted supply or composite
dealer
Registered Person
Exempted Goods or
Supplying
Exempted Goods or
Services or Both Tax
Invoice
Bill of
Supply
Paying Tax under
Composition Levy

Payment Voucher
• The recipient who is registered under GST has to issue a payment
voucher for the transactions(goods or services) on which reverse charge
is applicable to the supplier. For example Ajay cashew house registered
in Delhi had purchased cashew nuts from Vikram an agriculturist for Rs
100000 in Karnataka.
• In this case, the reverse charge would be applicable to Ajay cashew
house. CGST and SGST are required to be paid by Ajay cashew house on
reverse charge basis of Rs 5000( 5% * 100000). Ajay cashew house
reverse charge basis of Rs 5000( 5% * 100000). Ajay cashew house
would also need to issue a payment voucher to Vikram for Rs 100000.
• For example Vikram logistics a GTA registered in Karnataka provided
transportation services to a factory of Ajay fireworks in Delhi for Rs
200000. Ajay fireworks has to pay CGST and SGST on reverse charge
basis of Rs 10,000 (5% * 200000). A payment voucher of Rs 200000
would need to be issued by Ajay fireworks to Vikram logistics at the time
of making the payment.

GST Payment Process in Normal Cases
In Case of Reverse Charge
In Case of Reverse Charge

Difference between Voucher and Invoice
Voucher Invoice
Voucher is basically a written
document in support of a transaction.
It is proof that a particular transaction
has taken place for the value that is
stated in the voucher.
Invoice is a business document which
is prepared when one sells goods or
renders services to the another.
The voucher may be in form of cash Generally it is prepared by seller of
The voucher may be in form of cash
receipt, cash memo, bank pay in slip
Generally it is prepared by seller of
goods.
Voucher is necessary to carrying out
the audit functions
It will contain the information such as
name and address of the seller as well
as buyer/recipient, date of sales, clear
description of goods with quantity and
features.

Delivery Challan
• Rule 55 specifies the cases where at the time of removal of goods,
goods may be removed on delivery challan and invoice may be
issued after delivery.
• Delivery challan in TriplicateThe delivery challan shall be prepared
in TRIPLICATE, in case of supply of goods, in the following
manner:
• A delivery challan is a document that contains details of the
products in that particular shipment. It is issued at the time of
delivery of goods that may or may not result in a sale.

When do we issue a delivery challan?
The delivery challan is issued in the following cases-
• Where goods are transported on a sale or return basis.
• Where goods are transported for job work.
– For example, the printing of newspapers.
• Where goods are transported for reasons other than for supply.
– For example, shifting of goods from the old warehouse to a new one.
• Where the quantity of the goods supplied is not known.
• At the time of supply of liquified gas from the supplier’s place, the quantity
• At the time of supply of liquified gas from the supplier’s place, the quantity
is unknown.
• Where goods being transported are works of art that are to be delivered to
galleries.
• Where goods are being transported abroad for an event such as an
exhibition, fair or promotional purposes.
This cannot be termed “supply” or “export” since the goods are going for a
specific short term purpose and returning.
• Where, at the time of removal of goods, the seller cannot issue a tax invoice.

• Businesses using delivery challans
• Businesses that are involved in trading and manufacturing (especially the FMCG
industry as a whole)
• Businesses that have multiple warehouses where the transportation of goods between
warehouses is a regular occurrence (textile, clothing and apparel industries)
• Businesses that supply goods (furniture/home furnishings industry)
• Businesses that are wholesalers (electronics and electrical goods)
• Important GST rules on delivery challan
• A tax invoice must be issued in a case where a registered taxpayer intends to
• A tax invoice must be issued in a case where a registered taxpayer intends to
transport goods from one place of supply to another as per the provisions of Section
31 of the CGST Act. Particulars regarding the invoice value, description of the goods
supplied, their quantities, rates and amount and the GST applicable on them will
form part of the tax invoice.
• Certain cases arise where the transportation does not result in a sale, and hence there
is no tax invoice issued. In these cases, instead of a tax invoice, a delivery challan is
issued. Therefore, a delivery challan is a document that permits the transportation of
goods from one place to another. It also goes by the name dispatch slip or delivery
slip.

Credit and Debit Note
Definitions
1.1 Credit Note – Section 2(37)
• means a document issued by a
registered person under sub
section (1) of Section 34 of CGST
Act, 2017.
1.2 Debit Note – Section 2(38)
The
Value of
Goods or
Services
Mentione
d in Tax
Invoice is
₹ 6000
The
Actual
Value of
Goods or
Services
is ₹ 5000
Then The
Registere
d Person
needs to
issue
Credit
Note
Example
registered person under sub
section (3) of Section 34 of CGST
Act, 2017. The
Value of
Goods or
Services
Mentione
d in Tax
Invoice is
₹ 5000
The
Actual
Value of
Goods or
Services
is ₹ 6000
Then The
Registere
d Person
needs to
issue
Debit
Note
₹ 6000

Issuance of Credit Note – Section 34(1)
• Where a Tax Invoice has been issued for supply of goods or services or both
and;
– the value declared in the invoice is more than the actual value of the goods or services
provided; or
– the rate of GST or Tax amount charged is at a higher rate than what is applicable for the
kind of goods or services supplied; or
– the quantity received by the recipient is less than what is mentioned in the tax invoice; or
– the goods supplied are returned by the recipient;
Then the registered person, who has supplied such goods or services or both,
shall issue a Credit Note to the recipient.
• Once the Credit Note is issued, the tax liability of the supplier will reduce.
• Once the Credit Note is issued, the tax liability of the supplier will reduce.
• Issuance of Debit Note – Section 34(3)
• Where a Tax Invoice has been issued for supply of goods or services or both
and;
– the value declared in the invoice is less than the actual value of the goods or services
provided; or
– the rate of GST or Tax amount charged is at a lower rate than what is applicable for the
kind of goods or services supplied;
• Then the registered person, who has supplied such goods or services or both,
shall issue a Debit Note to the recipient.
• Once the Debit Note is issued, the tax liability of the supplier will increase.

Details of Credit Note to be furnished in return – Section 34(2)
• Any registered person who issues a credit note shall declare the details of
such credit note in the return for the month during which such credit note
has been issued but not later than
• September following the end of the financial year in which such supply
was made; or
• the date of furnishing of Annual return,
• whichever is earlier, and the tax liability shall be adjusted in prescribed
manner.
manner.
Details of Debit Note to be furnished in return – Section 34(4)
• Any registered person who issues a debit note shall declare the details of
such debit note in the return for the month during which such debit note
has been issued and the tax liability shall be adjusted in prescribed
manner.

Extract of Section 34 of CGST Act 2017
• Section 34 of CGST Act 2017: Credit and Debit Notes (CHAPTER VII –
TAX INVOICE, CREDIT AND DEBIT NOTES)
• Sub-Section (1) Where one or more tax invoices have been issued for supply of
any goods or services or both and the taxable value or tax charged in that tax
invoice is found to exceed the taxable value or tax payable in respect of such
supply, or where the goods supplied are returned by the recipient, or where
goods or services or both supplied are found to be deficient, the registered
person, who has supplied such goods or services or both, may issue to the
recipient one or more credit notes for supplies made in a financial year
containing such particulars as may be prescribed.
• Sub-Section (2) Any registered person who issues a credit note in relation to a
supply of goods or services or both shall declare the details of such credit note in
the return for the month during which such credit note has been issued but not
later than September following the end of the financial year in which such
supply was made, or the date of furnishing of the relevant annual return,
whichever is earlier, and the tax liability shall be adjusted in such manner as may
be prescribed:
• Provided that no reduction in output tax liability of the supplier shall be
permitted, if the incidence of tax and interest on such supply has been passed on
to any other person.

• Sub-Section (3) Where one or more tax invoices have been issued
for supply of any goods or services or both and the taxable value or
tax charged in that tax invoice is found to be less than the taxable
value or tax payable in respect of such supply, the registered
person, who has supplied such goods or services or both, shall
issue to the recipient one or more debit notes for supplies made in a
financial year containing such particulars as may be prescribed.
• Sub-Section (4) Any registered person who issues a debit note in
• Sub-Section (4) Any registered person who issues a debit note in
relation to a supply of goods or services or both shall declare the
details of such debit note in the return for the month during which
such debit note has been issued and the tax liability shall be
adjusted in such manner as may be prescribed.
• Explanation: For the purposes of this Act, the expression “debit
note” shall include a supplementary invoice.

E-Way Bill
• EWay Bill is an Electronic Way bill for movement of goods to be
generated on the eWay Bill Portal. A GST registered person cannot
transport goods in a vehicle whose value exceeds Rs. 50,000
(Single Invoice/bill/delivery challan) without an e-way bill that is
generated on ewaybillgst.gov.in.
• Alternatively, Eway bill can also be generated or cancelled through
• Alternatively, Eway bill can also be generated or cancelled through
SMS, Android App and by site-to-site integration through API.
When an eway bill is generated, a unique Eway Bill Number
(EBN) is allocated and is available to the supplier, recipient, and
the transporter.

When Should eWay Bill be issued?
• e-Way bill will be generated when there is a movement of goods in a vehicle/
conveyance of value more than Rs. 50,000 (either each Invoice or in aggregate
of all invoices in a vehicle/conveyance) –In relation to a ‘supply’
– For reasons other than a ‘supply’ ( say a return)
– Due to inward ‘supply’ from an unregistered person
• For this purpose, a supply may be either of the following:
– A supply made for a consideration (payment) in the course of business
– A supply made for a consideration (payment) which may not be in the course of
business
– A supply without consideration (without payment)In simpler terms, the term
‘supply’ usually means a:
– A supply without consideration (without payment)In simpler terms, the term
‘supply’ usually means a:
• Sale – sale of goods and payment made
• Transfer – branch transfers for instance
• Barter/Exchange – where the payment is by goods instead of in money
• Therefore, eWay Bills must be generated on the common portal for all these
types of movements. For certain specified Goods, the eway bill needs to be
generated mandatorily even if the value of the consignment of Goods is less than
Rs. 50,000:
• Inter-State movement of Goods by the Principal to the Job-worker by Principal/
registered Job-worker***,
• Inter-State Transport of Handicraft goods by a dealer exempted from GST
registration

Who should Generate an eWay Bill?
• Registered Person – E-way bill must be generated when there is a
movement of goods of more than Rs 50,000 in value to or from a
registered person. A Registered person or the transporter may
choose to generate and carry eway bill even if the value of goods is
less than Rs 50,000.
• Unregistered Persons – Unregistered persons are also required to
• Unregistered Persons – Unregistered persons are also required to
generate e-Way Bill.
• Transporter – Transporters carrying goods by road, air, rail, etc.
also need to generate e-Way Bill if the supplier has not generated an
e-Way Bill.

Cases when e-Way bill is Not Required
In the following cases it is not necessary to generate e-Way Bill:
• The mode of transport is non-motor vehicle
• Goods transported from Customs port, airport, air cargo complex or land customs station
to Inland Container Depot (ICD) or Container Freight Station (CFS) for clearance by
Customs.
• Goods transported under Customs supervision or under customs seal
• Goods transported under Customs Bond from ICD to Customs port or from one custom
station to another.
• Transit cargo transported to or from Nepal or Bhutan
• Movement of goods caused by defence formation under Ministry of defence as a
consignor or consignee
consignor or consignee
• Empty Cargo containers are being transported
• Consignor transporting goods to or from between place of business and a weighbridge for
weighment at a distance of 20 kms, accompanied by a Delivery challan.
• Goods being transported by rail where the Consignor of goods is the Central
Government, State Governments or a local authority.
• Goods specifed as exempt from E-Way bill requirements in the respective State/Union
territory GST Rules.
• Transport of certain specified goods- Includes the list of exempt supply of goods,
Annexure to Rule 138(14), goods treated as no supply as per Schedule III, Certain
schedule to Central tax Rate notifications.

Procedure for Generation of E-way Bill
Prerequisites for
Registration on the EWB
Portal
The Invoice/ Bill/ Challan
related to the consignment
of goods must be in hand
Prerequisites for
Generation of E-
way bill
If transport is by road –
Transporter ID or the Vehicle
number
If transport is by rail, air, or
ship – Transporter ID,
Transport document number,
and date on the document

Steps to Generate E-way Bill
Step-1: Login
to E-way bill
Portal
By Using
Username
and
Password
Step-2:
Generate New
Click on
Generate
New
under E-
way bill
Step-3: Enter the
Following Details
1. Transaction Type: Inward/Outward
2. Sub-type: Supply/Export/Job work/Recipient not
known/ for own use/ exhibition or fairs/ others
3. Document type: Select either of Invoice / Bill/
challan/ credit note/ Bill of entry or others if not
Listed
Step-4: Submit
the Application
The
system
validates
data
entered
and
throws up
an error if
any
Listed
4. Enter the Invoice/Document number
5. Document Date along with From and To
Address
6. Item Details: Product Name, Discription, HSN
Cod, Quantity, Unit, Value, Tax rates and cess if
any
7. Transporter Details: (Part B) Transporter name,
transporter ID, transporter Doc. No. & Date
any
Then you
will obtain
E-way Bill

Accounts and Records
• Production or manufacture of goods
• Inward and outward supply of goods or services or both (Purchase and Sales
Register)
• Stock of goods (Inventory Register)
• Input tax credit availed (Electronic Credit Ledger)
• Output tax payable and paid and (Electronic Liability and Electronic Cash
Ledger)
• Other particulars as may be prescribed
• Other particulars as may be prescribed
• Records of goods or services imported or exported or
• Records of supplies attracting payment of tax on reverse charge along with the
relevant documents, including invoices, bills of supply, delivery challans, credit
notes, debit notes, receipt vouchers, payment vouchers, refund vouchers and e-
way bills.
• Others: Such as Input CGST a/c, Output CGST a/c, Input SGST a/c. Output
SGST a/c, Input IGST a/c, Output IGST a/c

Records Information Required By Whom
Register of
Goods Produced
Account should contain detail of goods
manufactured in a factory or production house.
By every assessee
carrying out
manufacturing activity
Purchase Register All the purchases made within a tax period for
manufacturing of goods or provision of
services.
All Assessee
Sales Register Account of all the sales made within a tax
period must be maintained.
All Assessee
Stock Register This register should contain a correct stock of
inventory available at any given point of time.
All Assessee
inventory available at any given point of time.
Input Tax Credit
Availed
This register should maintain the details of
Input Tax Credit availed for a given tax period.
All Assessee
Output Tax
Liability
This register should maintain the details of
GST liability outstanding to be adjusted
against input credit or paid out directly.
All Assessee
Output Tax Paid This register should maintain the details of
GST paid for a particular tax period.
All Assessee
Other Records
Specififed
Government can further specify by way of a
notification, additional records and accounts to
be maintained.
Specific Businesses as
notified by the Govt.

• e-Ledger is an electronic form of passbook for GST. These e-ledgers are
available to all GST registrants on the GST portal.
• 1. E-Cash Ledger:
• e-Cash ledger indicates the amount that has been paid by the taxpayer to the
government. The amount in this ledger can be used to make payment of tax,
interest, liability, fees and so forth.
• To make any payment through this ledger the taxpayer needs to generate the
payment challan using the GST PMT-06 form. However, it shall be noted that
payment challan using the GST PMT-06 form. However, it shall be noted that
the challan generates through this is valid for 15 days only. Any of the
following modes of the payment can be used by the taxpayer:
• (i) Credit or Debit Card of authorized banks
• (ii) Internet Banking of authorized banks
• (iii) RTGS or NEFT through any bank
• (iv) Cheque or Demand Draft of any bank
• (v) Over-the-counter of the authorized banks only for the amounts not
exceeding 10,000 INR per challan.

• Over the counter (OTC) payments can be made if the GST payable is less
than Rs. 10,000. The amount can be paid by cash, cheque, or Demand
Draft (DD). Amounts exceeding Rs.10,000 should be paid using one of
the below options.
• Generating Challan
• Making payment through;
– Credit card
– Debit card
– NEFT
– NEFT
– RTGS
• The input tax credit as self-assessed in the return of a registered person
shall be credited to his electronic credit ledger, in accordance with
section 41, to be maintained in such manner as may be prescribed.

Manner of Utilization of Amount in Electronic Cash Ledger
• Sub-section 3 of section 49 of the CGST Act lays down the
following:
• The amount reflected in the electronic cash ledger may be used for
making any payment towards tax, interest, penalty, fee, or any other
amount in the prescribed manner.
• In the e-ledger, information is kept minor head-wise for each major
head. The ledger is displayed major head-wise i.e., IGST, CGST,
head. The ledger is displayed major head-wise i.e., IGST, CGST,
SGST/UTGST, and CESS. Each major head is divided into five
minor heads: Tax, Interest, Penalty, Fee, and Others.
• A registered taxpayer can make cash deposits in the recognized
Banks through the prescribed modes to the Electronic Cash Ledger
using any of the Online or Offline modes permitted by the GST
Portal. The Cash deposits can be used for making payments like tax
liability, interest, penalties, fees and others.

• Sub-sections (10) and (11) of section 49 of the CGST Act, 2017 provides a
facility to the registered person to transfer an amount from one (major/minor)
head to another (major/minor) head in the electronic cash ledger.
• The amount available in the electronic cash ledger can be utilised for payment of
any liability for the major and minor heads.
• For instance, if the registered person has made a deposit of tax erroneously i.e. by
virtue of human error, under a particular head instead of a specific head, the same
can be transferred to the respective intended head vide Form GST PMT-09.

• This Form can be used either for
• (i) transfer of erroneous deposits under any minor head of a major head to
any
• other minor head of same or other major heads or
• (ii) for any of the amounts already lying unutilised under any of the minor
heads in Electronic Cash ledger.
• For instance, a registered person has deposited a sum of ₹ 1,000 under the
head of “Interest” column of CGST & ₹ 1,000 under the head of
“Interest” column of SGST, instead of the head “Fee”. Such amount can
be transferred using Form GST PMT-09 for making a transfer to the head
be transferred using Form GST PMT-09 for making a transfer to the head
“Fee”. The said transfer is required using the above Form, because when
the Registered person has to make the remittance of
Tax/Interest/Penalty/Fee/Other amount at a stage “Offset Liabilities” in
any of the GST Returns/ Forms for Tax payments through Electronic
Cash Ledger, adequate amount should be available under the respective
head of account.
• Section 53A and section 17A of the IGST Act provides for transfer of
amount between Centre and States in accordance with section 49 of the
CGST Act allowing transfer of an amount from one head to another head
in the electronic cash ledger of the registered person.

• Other peculiar aspects of Electronic Cash Ledger
• An unregistered person has to make payment through electronic cash
ledger on the basis of temporary identification number generated through
common portal.
• Where the person has claimed refund of any amount from electronic cash
ledger, the amount of refund claimed would be debited from the
electronic cash ledger.
• Example
• M/s. Daksha Enterprises has made a cash deposit of ₹ 10,000 under minor
head 'tax' of major head 'SGST’. It has a liability of ₹ 2,000 for minor
head "Interest" under the major head "SGST". State whether M/s. Daksha
head 'tax' of major head 'SGST’. It has a liability of ₹ 2,000 for minor
head "Interest" under the major head "SGST". State whether M/s. Daksha
Enterprises can utilise the amount available for payment of interest.
• Discussion
• The Registered person is allowed to transfer the amount available under
any minor head of a major head to any of the minor head of the same or
other major head as per Section 49(10) of the CGST Act vide Form PMT-
09. Therefore, in the given case, amount of ₹ 10,000 available under
minor head ‘tax’ of major head ‘SGST’ can be utilised for payment of
liability of ₹ 2,000 under minor head ‘interest’ of the same major head,
after making a due transfer entry using Form GST PMT-09 from the
minor head of ‘tax’ to ‘interest’.

2. Electronic Credit Ledger
• e-Credit ledger or electronic credit ledger is maintained in the form GST
PMT-02 on the GST Portal.
• This ledger helps in tracking all the Input Tax Credit (ITC) claims made
by the taxpayer. However, it shall be noted that any remaining amount in
the e-Credit ledger can be used in making the payment of output tax
liability only. This ledger contains the following information:
• (i) ITC available on the purchases made from the registered taxpayers
• (ii) ITC eligible against the distribution from an ISD
• (ii) ITC eligible against the distribution from an ISD
• (iii) ITC available on semi-finished goods held in stock on the day
immediately after the date on which he becomes liable to pay tax.
• (iv) ITC eligible on semi-furnished inputs or inputs held in stock on the
date on which the registered taxable person becomes a normal dealer
from a composition dealer.
• (v) ITC available on the payment made by the taxpayer under the RCM
(Reverse Charge Mechanism).

Manner of Utilization of ITC
• 1. Available IGST credit in the credit ledger should first be utilized towards payment of IGST.
– (i) Remaining amount if any, can be utilized towards the payment of CGST and SGST/UTGST in any order
and in any proportion, i.e. ITC of IGST can be utilized either against CGST or SGST.
• 2. Entire ITC of IGST is to be fully utilised first before the ITC of CGST or SGST/UTGST can be utilized.
• 3. Available CGST Credit in the credit ledger shall first be utilized for payment of CGST.
– (i) Remaining amount if any, will be utilised for payment of IGST
• 4. Available SGST/UTGST credit in the credit ledger shall first be utilised for payment of SGST/UTGST
– (i) Remaining amount if any, will be utilised for payment of IGST, only when credit of CGST is not available
for payment of IGST
Note: CGST Credit cannot be utilised for payment of SGST/UTGST. Similarly, SGST/UTGST credit cannot be
utilised for payment of CGST.

E-Liability Register
Section 49 (7), (8) & (9) Rule 85 of CGST Act, 2017
• E-Liability Register will reflect the total tax liability
of a taxpayer for a particular tax period.
• Sub-section (7) of section 49 enumerates about the
third kind of ledger [Auto
• updated on common portal] viz. Electronic Liability
Register. While the terms
Register. While the terms
• “Electronic Cash Ledger” and “Electronic Credit
Ledger” are defined in the Act, the
• term “Electronic Liability Register” is not defined.
The Section lays down that all
• liabilities of a taxable person will be maintained in a
separate register.

Order of Discharge of Tax and Other Dues
• Sub-section (8) prescribes the chronological order in
which the
• liability of a taxable person has to be discharged:
– 1. self -assessed tax and other dues for the previous tax periods
have to be discharged first.
– 2. the self -assessed tax and other dues for the current period
have to be discharged next.
have to be discharged next.
– 3. Once these two steps are exhausted, thereafter any other
amount payable including demand determined under section 73
or section 74 to be discharged. In other words, the liability if
any, arising out of demand notice and adjudication proceedings
comes last. This sequence has to be mandatorily followed.
• The expression “other dues” referred above mean interest,
penalty, fee or any other amount payable under the Act or the
rules made there under.

Chapter IX of CGST Rules provide the following:
(I) Debit to electronic liability register:
• all amounts payable towards tax, interest, late fee and any other amount as per return filed;
• all amounts payable towards tax, interest, penalty and any other amount determined in a
proceeding by an Assessing authority or as ascertained by the taxable person;
• interest payable under Section 50.
• any interest amount that may accrue from time to time.
(II) Debit to Electronic Credit/Cash ledger:
Debit to Electronic Credit Ledger and Credit to
Electronic Liability Register
Debit to Electronic Cash Ledger and Credit to
Electronic Liability Register
Payment of all the liabilities of a registered person
as per his return subject to section 49 or section
49A or section 49B.
Payment of all the liabilities of a registered person
as per his return subject to section 49 or section
49A or section 49B.
Payment of TDS deducted under section 51, TCS
deducted by ecommerce operator under section 52,
amount payable under reverse charge basis,
amount payable under section 10, amount payable
towards payment of interest, penalty, fee or any
other amount under the Act.

Introduction to GST

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Introduction to GST