ELECTRONIC CREDIT LEDGER

[Mr. M. GOVINDARAJAN]

Input tax credit

The expression ‘input tax credit’ is defined under Section 2(63) of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) as the credit of input tax.  The expression ‘input tax’ is defined under Section 2(62) of the Act in relation to a registered person, as the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes–

• the integrated goods and services tax charged on import of goods;
• the tax payable under the provisions of sub-sections (3) and (4) of section 9;
•  the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;
• the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or
• the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act,

but does not include the tax paid under the composition levy. 

The tax payer can adjust the input tax credit accumulated in his account against the payment of GST against the supply of goods and services rendered by him subject to the conditions stipulated in the provisions of Act and rules made there under.

Electronic Credit Ledger

The Electronic Credit Ledger (‘ECL’ for short) is maintained by the GST portal.  In the Electronic Credit Ledger, all credits accrued on account of inward supplies made by a taxpayer within a tax period are accumulated. The ledger is maintained Major Head-wise, i.e., IGST, CGST, SGST, and CESS.  The ECL shall be maintained in Form GST PMT – 02 for each registered person eligible to input tax credit.  Every claim of input tax credit shall be credit in the ECL.  The input tax credit as self-assessed in the return by a registered person is credited to his electronic credit ledger. The only way the electronic credit ledger can be credited is through filing of returns.  The input tax credit can only be utilized for business purposes.  This ECL is not maintained for composition taxpayer, ISD taxpayer and Tax Deductor & E-commerce operator.

Viewing the ECL

The Taxpayers can view their Electronic Credit Ledger in the post login mode by logging on to the GST Portal. Path: Services > Ledgers > Electronic Credit Ledger.  An Electronic Credit Ledger can be viewed only by the taxpayers themselves or by the concerned Jurisdictional Officer.  No third party can view this ECL.  A GST Practitioner can view the ECL of a taxpayer who has been authorized by the taxpayer.  The taxpayer can allow or deny GST practitioner to view his credit ledger by online engaging/disengaging a GST practitioner.  The ECL cannot be edited. The taxpayer can ONLY view the details in the ECL.  The taxpayer can view the Electronic Credit Ledger for a maximum period of 6 months.

Checking the availability of input tax credit

A taxpayer can login to the GST Portal and check the available balance on the landing page of the Electronic Credit Ledger. Path: Services > Ledgers > Electronic Credit Ledger.

Utilisation of input tax credit

The amount available in the ECL  can be utilized for paying of tax liabilities as per the following rules:

• 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.
• 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.
• 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.
• CGST input tax credit cannot be utilized towards payment of SGST/UTGST liabilities and
• SGST/UTGST input taxed credit cannot be utilized towards payment of CGST liabilities.

Credit availed on CESS will be available for setoff against any output tax liability of CESS only. There is no Inter head adjustment for CESS Input Tax Credit.

Refund

A registered person can claim refund of any unutilized amount from the electronic credit ledger in accordance with the provisions of section 54, the amount to the extent of the claim shall be debited in the said ledger.  If the refund is rejected, either fully or partly, the amount debited to the extent of rejection, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03.  A refund shall be deemed to be rejected, if the appeal is finally rejected or if the claimant gives an undertaking to the proper officer that he shall not file an appeal.

 Where a registered person has claimed refund of any amount paid as tax wrongly paid or paid in excess for which debit has been made from the ECL, the said amount, if found admissible, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03.

Where a registered person deposits the amount of erroneous refund sanctioned to him along with interest and penalty through FORM GST DRC-03, by debiting the electronic cash ledger, on his own or on being pointed out, an amount equivalent to the amount of erroneous refund deposited by the registered person shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03A.

Other points

• The ECL can be debited only against an existing tax liability.
• Unless the taxpayer makes a debit entry from the Electronic Credit Ledger against a specific liability, the amount available in the Electronic Credit Ledger cannot be assigned to any liability.
•  In exceptional circumstances as permitted in the Act and rules, especially when the amount of additional demand is not stayed by the Appellate Authority, Tribunal, or Court, the credit can be debited to the extent of the demand by the proper officer.
• The taxpayer can download and save the Credit ledger from his dashboard in PDF and CSV format on his computer/laptop.
• Provisional credit tables display the balance of provisional and mismatch credit, tax period wise. Navigate to Services > Ledgers > Electronic Credit Ledger > Provisional Credit Balance link to view it.
•  No entry shall be made directly in the electronic credit ledger under any circumstance.

Discrepancy

A registered person shall, upon noticing any discrepancy in his ECL, communicate the same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04.