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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Procedural Compliance under GST

Which statement about the electronic cash ledger and the electronic credit ledger under section 49 of the CGST Act is correct?

The electronic cash ledger can pay tax, interest, penalty, fees or any other amount payable. The electronic credit ledger can be used only for paying output tax under the CGST or IGST Act, not interest, penalty or fees.

  1. AInput tax credit may be used to pay interest, penalty and fees
  2. BCash ledger amounts may be used for tax, interest, penalty, fees or any other amount, while credit ledger amounts may be used only for output taxCorrect
  3. CBoth ledgers can be used for any payment under the Act
  4. DCash ledger amounts can be used only for interest and penalty, not tax

Explanation

Section 49(3) allows the cash ledger to be used for tax, interest, penalty, fees or any other amount. Section 49(4) allows the credit ledger to be used only for output tax under the CGST or IGST Acts. Thus credit cannot pay interest or penalty.

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