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Manual on Utilizing Cash/ ITC for Payment of Demand

How can I make payment towards outstanding demand appearing in Electronic Liability Register (Part-II) at the GST portal?

To make payment towards outstanding demand appearing in Electronic Liability Register (Part-II) at the GST portal, perform following steps:

1. Access the https://www.gst.gov.in/ URL. The GST Home page is displayed.

2. Login to the GST Portal with valid credentials.

3. Click the Services > Ledgers > Payment towards Demand command.

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4. The Outstanding Demand page is displayed. You can see the all the Demand IDs against which demand is outstanding. Click the link under Integrated Tax, Central Tax, State Tax and Cess to view further details.

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Note: The Minor Heads include: Tax, Interest, Penalty, Fee and Others. The Minor Head wise balance is displayed for the selected Major Head.

5. Click the Close button.

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6. Click the SELECT button to select the Demand ID.

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7. Outstanding Demand, Cash Ledger Balance and Credit Ledger Balance details are displayed.

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The outstanding demand against the Demand ID as on date are shown in below table.

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Use the scroll bar to move to the right to enter the amount intended to be paid against that Demand ID.

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Cash Ledger Balance

The cash available as on date are shown in below table.

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Use the scroll bar to move to the right to enter the amount to be paid through cash against that Demand ID.

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Credit Ledger Balance

The ITC available as on date are shown in below table.

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Use the scroll bar to move to the right to enter the amount to be paid through ITC against that Demand ID.

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8. Once you have entered the amount, click the SET-OFF button.

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9. A confirmation message is displayed. Click the OK button.

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10. A success message is displayed. Payment Reference Number is displayed on the screen. Click the OK button.

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Note:

1. On utilization of ITC, Debit entry number will be generated and posting will be done against that demand ID in Electronic Liability Register Part-II as well as in the Electronic Credit Ledger.

2. On utilization of Cash, Debit entry number will be generated and posting will be done against that demand ID in Electronic Liability Register Part-II as well as in the Electronic Cash Ledger.

 

1. I was trying to make payment of the tax and was trying to offset my liability from the Electronic Cash Ledger; however I faced error. On what basis can I utilize the balance in Electronic Cash ledger?
The utilization of Cash from Electronic Cash Ledger is done on the basis of following principles:

1. RULE 1: The amount of Cash deposited for CGST/SGST/UTGST/IGST/Cess in the Electronic Cash Ledger can be used for payment of CGST/SGST/UTGST/IGST/Cess liabilities respectively. No inter head adjustment is allowed for major heads.

2. RULE 2: Cash deposited under the minor head i.e. Tax/Interest/Fee/Penalty/Others in the Electronic Cash Ledger can be utilized for payment of Tax/Interest/Fee/Penalty/Others liabilities respectively of the same major head. No minor head adjustment is allowed.

3. RULE 3: Amount under Cash Ledger will be used in the following priority order:

(a) self-assessed tax, and other dues related to returns of previous tax periods;

Previous month tax liability covers:

a. Tax liability reported but not paid

b. Interest/penalty/fee arising out of previous month return period declarations



(b) self-assessed tax, and other dues related to return of current tax period;

Current month tax liability includes:

a. Liability for invoices and amendments uploaded for previous months

b. ITC reversal due to mismatch of invoice (Reversal under Section 42 (5) & (6) for (M-2) Tax Period)

c. Tax amount increased in M Tax period as a consequence of reduction of liability by supplier in (M-2) tax period but without corresponding reduction in ITC by the receiver (Section 43(6))

d. Liability for invoices and other consolidated declarations uploaded for current month.

(c) Any other amount payable under the Act or the rules made thereunder including the demand determined under section 73 or 74.

4. RULE 4: The amount allowed to be entered for utilization of cash can’t be more than the amount of balance available under the respective major/minor head of tax in Cash Ledger.

2. How to utilize the Input Tax Credit?
RULE 1: Credit can be utilized to pay off the liabilities in the following manner:

(a) IGST input tax credit shall first be utilized towards payment of IGST liability and the amount remaining, if any, may be utilized towards the payment of CGST, SGST/UTGST liabilities in any order, before utilizing the CGST, SGST/UTGST credit.

(b) CGST input tax credit shall first be utilized towards payment of CGST liability and the amount remaining, if any, may be utilized towards the payment of IGST liability. CGST credit shall be utilized only if IGST credit is not available.

(c) SGST/UTGST input tax credit shall first be utilized towards payment of SGST/UTGST liability and the amount remaining, if any, may be utilized towards payment of IGST liability (if no CGST credit is available). SGST/UTGST credit shall be utilized only if IGST credit is not available.

(d) CGST input tax credit cannot be utilized towards payment of SGST/UTGST liabilities and

(e) SGST/UTGST input taxed credit cannot be utilized towards payment of CGST liabilities.

RULE 2: ITC cannot be utilized for payment of reverse charge liabilities.

RULE 3: ITC can be utilized for payment of tax only.

RULE 4: ITC can’t be utilized for payment of TDS/TCS/interest/penalty/fee/others.

RULE 5: The amount allowed to be entered for utilization of credit can’t be more than the amount of balance available in the Electronic Credit Ledger.



RULE 6: A unique transaction number shall be generated at the Common Portal for each debit or credit to the electronic cash or credit or liability ledger and the same will be reflected in the corresponding ledgers of the taxpayer.

RULE 7: Credit availed on input CESS paid on inward supplies will be available for set-off against any output tax liability of Cess only. There is no Inter head adjustment for Cess Input Tax Credit.

3. Can I perform intra-head or inter-head transfer of amount available in Electronic Cash Ledger?
Yes, you can perform intra-head or inter-head transfer of amount, as available in Electronic Cash Ledger, using Form GST PMT-09. Form GST PMT-09 enables any registered taxpayer to perform, intra-head or inter-head transfer of amount, as available in Electronic Cash Ledger. Thus, a registered taxpayer can now file Form GST PMT-09 for transfer of any amount of tax, interest, penalty, fee or others, under one (major or minor) head to another (major or minor) head, as available in the Electronic Cash Ledger.

Navigate to Services > Ledgers > Electronic Cash Ledger > File GST PMT-09 For Transfer of Amount option to file Form GST PMT-09.

 

FAQs

Q.1 What is utilization of cash/ ITC for payment of demand or any other amount due about?

Ans: Utilization of cash/ ITC for payment of demand is about payments of non-return related liabilities. These liabilities are created through generation of Demand ID by tax officials, which is a reference number of the order or application, appearing in the Electronic Liability Register (Part-II).

Q.2 From which ledger payments against the liabilities of a particular demand ID be made?

Ans: The payments against the liabilities of a particular demand ID can be made by using the following ledgers:

Cash balance available in the Electronic Cash Ledger; and/or
Input tax credit balance available in the Electronic Credit Ledger.
Q.3 How does the taxpayer get to know about outstanding demands?

Ans: The taxpayer can get the information regarding outstanding demands from Electronic Liability Register (Part-II). This is shown in a table after logging in and navigating to Services > Ledgers > Electronic Liability Register > Part – II: Other than return related liabilities link

Q.4 Who can access the functionality of “Utilize cash/ ITC for payment of demand or any other amount due”?

Ans: The following persons can have access for the functionality of Utilizing cash/ITC for payment of demand or any other amount due:

Registered taxpayer having a valid GSTIN or
Person having temporary id or
Taxpayers after cancellation of registration or
Authorized/ Jurisdictional tax official
Q.5 What are the pre-conditions for utilization of cash /ITC for payment of demand or any other amount due?

Ans: The pre-conditions for utilization of cash /ITC for payment of demand or any other amount due are:

Demand ID is already generated against which payment is yet to be made.
User should have valid User ID and password and has necessary access for the same.
Q.6 What are the details displayed to the taxpayer after selecting a Demand ID?

Ans: The following details are displayed after user selects a Demand ID:-


Outstanding liability towards tax, interest, penalty, fees and Others for IGST/CGST/SGST/UTGST/Cess against the selected Demand ID
Balance as per Electronic Cash ledger
Balance as per Electronic Credit Ledger
Q.7 What are the details to be entered by the taxpayer after selecting a Demand ID for payment?

Ans: The following details are to be entered by the taxpayer after selecting a Demand ID for payment:

Amount intended to be paid
Amount intended to be paid through Cash
Amount intended to be paid through ITC
Q.8 How is the relief towards reduced penalty available to the taxpayer, if payment is made within the specified period as per law?

Ans: In case Demand ID is created under section 74 of the CGST/SGST/IGST/Cess Act, then as per law, GST Portal shows reduced payment liability towards penalty, if taxpayer makes payment, as per following conditions:

If Payment is being made within 30 days from the date of communication of the order and
taxpayer is making full payment of tax and interest, stated in the order;
The penalty amount displayed is 50% of the amount stated in the order and the balance 50% of the penalty is waived off. A credit entry is passed in the Electronic Liability Register – Part II accordingly.

Q.9 Can a user make part payment or multiple payments against a particular Demand ID?

Ans: Yes, GST Portal allows user for making part payment at multiple occasions, against a particular demand ID, till the outstanding balance becomes zero.

Q.10 Are there any conditions for a taxpayer to be eligible for waiver of penalty against a Demand ID?

Ans: Only if the payment is made against a Demand ID, created under Section 74 of the Act, within the specified period of 30 days from the date of communication of the order, the taxpayer is eligible for waiver of 50% of the penalty levied in the order.

Following conditions must also be fulfilled:

The amount of penalty waiver will be considered if the demands included in the order, is paid off completely, across the Acts.
If the taxpayer doesn’t pay off the reduced penalty along with tax and interest in full, within 30 days, no entries of reduced penalty will be posted in the Liability Register – Part II.
Non-payment of any amount included in the demand towards “others” or Fees” won’t be considered towards eligibility of waiver of 50% of the penalty amount.
This convention will hold for each demand created under the aforesaid section.
Such entry of waiver of penalty will be tagged against the same demand only for which the payment is being made.
Q.11 How would the taxpayer know that the utilization of cash/ITC has been successful?

Ans: On click of “Set-Off” button, if payment is successful, a success message is displayed along with PRN (Payment Reference Number) and all the relevant ledgers get updated.

Q.12 What is Payment Reference Number?

Ans: Payment Reference Number is a unique reference number for any payment transaction done on the GST Portal which gets posted to Electronic Liability Register Part-II.

Q.13 Which ledgers of the taxpayer gets updated on utilization of cash/ITC?

Ans:

i. On utilization of ITC, Debit entry number is generated and posting is done against that demand ID in Electronic Liability Register Part-II as well as in the Electronic Credit Ledger.

ii. On utilization of Cash, Debit entry number is generated and posting is done against that demand ID in Electronic Liability Register Part-II as well as in the Electronic Cash Ledger.

iii. In case of full payment is made under Demand order raised under Section 74 of CGST/SGST Act read with section 20 of IGST Act or Section 21 of UTGST Act, an entry would be posted in the Electronic Liability Register – Part II for the 50% penalty waiver.