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CA Intermediate · Taxation · Payment of Tax

Under the CGST Act, which of the following correctly describes the manner of payment of tax and the use of the electronic cash ledger by a registered person?

The electronic cash ledger can be used to pay tax, interest, penalty, fees or any other amount under the Act. By contrast, the electronic credit ledger can pay only output tax, not interest, penalty or late fee.

  1. AAmount in the cash ledger can be used to pay tax, interest, penalty, fees or any other amount, and not only taxCorrect
  2. BThe cash ledger can be used only to pay tax, never interest or penalty
  3. CBalance in the electronic cash ledger cannot be refunded in any circumstance
  4. DITC in the credit ledger can be used to pay interest and late fee

Explanation

The electronic cash ledger can be used for tax, interest, penalty, fees or any other amount payable under the Act. Option 4 is wrong because credit ledger ITC can be used only for tax (output tax), not interest, penalty or fee. Option 3 is wrong because balance in the cash ledger can be claimed as refund by way of return.

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