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CA Intermediate · Taxation · Tax Deduction at Source and Collection of Tax at Source

Under section 51 of the CGST Act, 2017, after a notified deductor deducts tax at source from a payment to a supplier and files its return, where is the amount credited in the supplier's account on the GST portal?

The deducted amount is credited to the electronic cash ledger of the supplier, based on the deductor's return in Form GSTR-7. The supplier can use it to discharge its tax liability, whereas the electronic credit ledger holds only input tax credit.

  1. AElectronic cash ledger of the supplierCorrect
  2. BElectronic credit ledger of the supplier
  3. CElectronic liability register of the supplier
  4. DElectronic cash ledger of the deductor

Explanation

The tax deducted is credited to the electronic cash ledger of the supplier (the deductee) on the basis of the deductor's return (GSTR-7). The supplier can then use it to pay its tax liability. It does not go to the electronic credit ledger, which holds input tax credit, and it is not the deductor's own cash.

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