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CA Intermediate · Taxation · Payment of Tax

Under the CGST Act, 2017, which statement about the electronic cash ledger is correct?

The correct statement is that deposits to the electronic cash ledger can be made by net banking and similar modes, and the balance can pay tax, interest, penalty, fee or any other amount. It is separate from the credit ledger, and there is no automatic transfer between them.

  1. ADeposits can be made by net banking, and tax, interest, penalty, fee or any other amount can be paid from itCorrect
  2. BMoney in it can be used only for paying tax, not interest or penalty
  3. CBalance in it is automatically carried to the electronic credit ledger every month
  4. DDeposits can be made only by cheque drawn on an authorised bank

Explanation

The electronic cash ledger is credited by deposit through authorised modes such as net banking, and it can be used for tax, interest, penalty, fee or other amounts payable. It is separate from the credit ledger and has no automatic transfer. Cheque is not the only mode.

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