ICAI Notes: Payment of Tax | Taxation for CA Intermediate PDF Download

 Page 1


LEARNING OUTCOMES 
a
 
 
CHAPTER
13 
 
PAYMENT OF TAX 
The section numbers referred to in the Chapter pertain to CGST Act, unless 
otherwise specified.  Examples/Illustrations/Questions and Answers, as the 
case may be, given in the Chapter are based on the position of GST law existing 
as on 30.04.2023. 
After studying this Chapter, you will be able to – 
? describe three kinds of ledgers/register available to a
registered person-electronic cash ledger, electronic credit
ledger and electronic liability register.
? understand the methodology of cross utilization of credit.
? comprehend and apply the chronological order in which the
liability of a taxable person has to be discharged.
? identify and analyse the circumstances in which penal interest
is levied.
? procedure for transfer of input tax credit between Central and
State Government
© The Institute of Chartered Accountants of India
Page 2


LEARNING OUTCOMES 
a
 
 
CHAPTER
13 
 
PAYMENT OF TAX 
The section numbers referred to in the Chapter pertain to CGST Act, unless 
otherwise specified.  Examples/Illustrations/Questions and Answers, as the 
case may be, given in the Chapter are based on the position of GST law existing 
as on 30.04.2023. 
After studying this Chapter, you will be able to – 
? describe three kinds of ledgers/register available to a
registered person-electronic cash ledger, electronic credit
ledger and electronic liability register.
? understand the methodology of cross utilization of credit.
? comprehend and apply the chronological order in which the
liability of a taxable person has to be discharged.
? identify and analyse the circumstances in which penal interest
is levied.
? procedure for transfer of input tax credit between Central and
State Government
© The Institute of Chartered Accountants of India
  
 
GOODS AND SERVICES TAX 
a
 
 13.2 
 
 
 
1. INTRODUCTION 
In the GST regime, for any intra-state supply, taxes to be paid are the Central GST 
(CGST), going into the account of the Central 
Government and the State GST (SGST)/(UTGST), going 
into the account of the concerned State Government. 
For any inter-state supply, tax to be paid is Integrated 
GST (IGST) having components of both CGST and SGST. In addition, certain 
categories of registered persons will be required to pay to the Government account 
Payment of Tax
Relevant Definitions
Electronic Cash Ledger
Electronic Credit Ledger
Electronic Liability Register
Interest on delayed payment of tax
Transfer of input tax credit
 
CHAPTER OVERVIEW 
© The Institute of Chartered Accountants of India
Page 3


LEARNING OUTCOMES 
a
 
 
CHAPTER
13 
 
PAYMENT OF TAX 
The section numbers referred to in the Chapter pertain to CGST Act, unless 
otherwise specified.  Examples/Illustrations/Questions and Answers, as the 
case may be, given in the Chapter are based on the position of GST law existing 
as on 30.04.2023. 
After studying this Chapter, you will be able to – 
? describe three kinds of ledgers/register available to a
registered person-electronic cash ledger, electronic credit
ledger and electronic liability register.
? understand the methodology of cross utilization of credit.
? comprehend and apply the chronological order in which the
liability of a taxable person has to be discharged.
? identify and analyse the circumstances in which penal interest
is levied.
? procedure for transfer of input tax credit between Central and
State Government
© The Institute of Chartered Accountants of India
  
 
GOODS AND SERVICES TAX 
a
 
 13.2 
 
 
 
1. INTRODUCTION 
In the GST regime, for any intra-state supply, taxes to be paid are the Central GST 
(CGST), going into the account of the Central 
Government and the State GST (SGST)/(UTGST), going 
into the account of the concerned State Government. 
For any inter-state supply, tax to be paid is Integrated 
GST (IGST) having components of both CGST and SGST. In addition, certain 
categories of registered persons will be required to pay to the Government account 
Payment of Tax
Relevant Definitions
Electronic Cash Ledger
Electronic Credit Ledger
Electronic Liability Register
Interest on delayed payment of tax
Transfer of input tax credit
 
CHAPTER OVERVIEW 
© The Institute of Chartered Accountants of India
 
 
 
13.3
PAYMENT OF TAX 
a
a
 
 
13.3 
- tax deducted at source (TDS) and tax collected at source (TCS)
1
. In addition, 
wherever applicable, interest, penalty, fees and any other payment will also be 
required to be made. 
The introduction of E-ledgers is a unique feature under the GST regime. Electronic 
Ledgers or E-Ledgers are of two types. One set is prepared and updated by the 
Taxpayer – Electronic Cash Ledger and Electronic Credit Ledger. Second set is 
prepared and updated on the basis of returns furnished by the Registered person 
or Tax authority i.e. Electronic Liability register. 
Once a taxpayer is registered on common portal (GSTN), two e-ledgers (Cash & 
Input Tax Credit ledger) and an electronic tax liability register will be automatically 
opened and displayed on his dashboard at all times. 
Chapter X of the CGST Act, 2017, prescribes the provisions relating to payment of 
tax containing sections 49 to 53A. Bird’s eye view of coverage under these sections 
is as under-  
? Section 49 discusses the three ledgers namely the electronic cash ledger, 
electronic credit ledger and electronic liability register,  
? Section 49A & 49B discusses about the utilisation of input tax credit and its 
order of utilisation. 
? Section 50 discusses about the interest on delayed payment of tax.  
? Section 51 lays down the circumstances in which tax deduction at source 
(TDS) becomes mandatory.  
? Section 52 deals with the circumstances when tax is to be collected at source 
(TCS) by the Electronic Commerce Operator.  
? Further, the manner of transfer of ITC is laid down in section 53 and  
? Transfer of certain amounts is discussed in section 53A. 
 
1
It may be noted that sections 51 & 52 dealing with provisions relating to TDS & TCS have 
been discussed in detail in chapter-14 in this Module of the Study Material. 
© The Institute of Chartered Accountants of India
Page 4


LEARNING OUTCOMES 
a
 
 
CHAPTER
13 
 
PAYMENT OF TAX 
The section numbers referred to in the Chapter pertain to CGST Act, unless 
otherwise specified.  Examples/Illustrations/Questions and Answers, as the 
case may be, given in the Chapter are based on the position of GST law existing 
as on 30.04.2023. 
After studying this Chapter, you will be able to – 
? describe three kinds of ledgers/register available to a
registered person-electronic cash ledger, electronic credit
ledger and electronic liability register.
? understand the methodology of cross utilization of credit.
? comprehend and apply the chronological order in which the
liability of a taxable person has to be discharged.
? identify and analyse the circumstances in which penal interest
is levied.
? procedure for transfer of input tax credit between Central and
State Government
© The Institute of Chartered Accountants of India
  
 
GOODS AND SERVICES TAX 
a
 
 13.2 
 
 
 
1. INTRODUCTION 
In the GST regime, for any intra-state supply, taxes to be paid are the Central GST 
(CGST), going into the account of the Central 
Government and the State GST (SGST)/(UTGST), going 
into the account of the concerned State Government. 
For any inter-state supply, tax to be paid is Integrated 
GST (IGST) having components of both CGST and SGST. In addition, certain 
categories of registered persons will be required to pay to the Government account 
Payment of Tax
Relevant Definitions
Electronic Cash Ledger
Electronic Credit Ledger
Electronic Liability Register
Interest on delayed payment of tax
Transfer of input tax credit
 
CHAPTER OVERVIEW 
© The Institute of Chartered Accountants of India
 
 
 
13.3
PAYMENT OF TAX 
a
a
 
 
13.3 
- tax deducted at source (TDS) and tax collected at source (TCS)
1
. In addition, 
wherever applicable, interest, penalty, fees and any other payment will also be 
required to be made. 
The introduction of E-ledgers is a unique feature under the GST regime. Electronic 
Ledgers or E-Ledgers are of two types. One set is prepared and updated by the 
Taxpayer – Electronic Cash Ledger and Electronic Credit Ledger. Second set is 
prepared and updated on the basis of returns furnished by the Registered person 
or Tax authority i.e. Electronic Liability register. 
Once a taxpayer is registered on common portal (GSTN), two e-ledgers (Cash & 
Input Tax Credit ledger) and an electronic tax liability register will be automatically 
opened and displayed on his dashboard at all times. 
Chapter X of the CGST Act, 2017, prescribes the provisions relating to payment of 
tax containing sections 49 to 53A. Bird’s eye view of coverage under these sections 
is as under-  
? Section 49 discusses the three ledgers namely the electronic cash ledger, 
electronic credit ledger and electronic liability register,  
? Section 49A & 49B discusses about the utilisation of input tax credit and its 
order of utilisation. 
? Section 50 discusses about the interest on delayed payment of tax.  
? Section 51 lays down the circumstances in which tax deduction at source 
(TDS) becomes mandatory.  
? Section 52 deals with the circumstances when tax is to be collected at source 
(TCS) by the Electronic Commerce Operator.  
? Further, the manner of transfer of ITC is laid down in section 53 and  
? Transfer of certain amounts is discussed in section 53A. 
 
1
It may be noted that sections 51 & 52 dealing with provisions relating to TDS & TCS have 
been discussed in detail in chapter-14 in this Module of the Study Material. 
© The Institute of Chartered Accountants of India
  
 
GOODS AND SERVICES TAX 
a
 
 13.4 
Chapter IX of CGST Rules, 2017 containing Rules 85 to 88C deals with provisions 
relating to payment of tax.  Amongst these rules, rule 86A, 86B and 88B have 
already been discussed in detail in Chapter-8: Input tax credit.  Rule 88C will be 
discussed in Chapter-15: Returns. 
Before proceeding to understand the provisions of section 49, 49A, 49B, 50, 53, 53A 
& the relevant rules, let us first go through few relevant definitions. 
2. RELEVANT DEFINITIONS 
? Agent means a person, including a factor, broker, commission agent, arhatia, 
del credere agent, an auctioneer or any other mercantile agent, by whatever 
name called, who carries on the business of supply or receipt of goods or 
services or both on behalf of another [Section 2(5)]. 
? Authorised bank shall mean a bank or a branch of a bank authorised by the 
Government to collect the tax or any other amount payable under this Act 
[Section 2(14)]. 
? Central Tax means the central goods and services tax levied under Section 9 
[Section 2(21)]. 
? Common portal means the common goods and services tax electronic portal 
referred to in section 146 [Section 2(26)]. 
? Council means the Goods and Services Tax Council established under article 
279A of the Constitution [Section 2(36)]. 
? Cess shall have same meaning as assigned to it in the Goods and Service Tax 
(Compensation to States) Act [Section 2(22)].  
? Electronic Cash ledger means the electronic cash ledger referred to in sub-
section (1) of Section 49 [Section 2(43)]. 
? Electronic Credit ledger means the electronic credit ledger referred to in 
sub-section (2) of section 49 [Section 2(46)]. 
Provisions of payment of tax under CGST Act, 2017 have also been made 
applicable to IGST Act, 2017 vide section 20 of the IGST Act, 2017.    
© The Institute of Chartered Accountants of India
Page 5


LEARNING OUTCOMES 
a
 
 
CHAPTER
13 
 
PAYMENT OF TAX 
The section numbers referred to in the Chapter pertain to CGST Act, unless 
otherwise specified.  Examples/Illustrations/Questions and Answers, as the 
case may be, given in the Chapter are based on the position of GST law existing 
as on 30.04.2023. 
After studying this Chapter, you will be able to – 
? describe three kinds of ledgers/register available to a
registered person-electronic cash ledger, electronic credit
ledger and electronic liability register.
? understand the methodology of cross utilization of credit.
? comprehend and apply the chronological order in which the
liability of a taxable person has to be discharged.
? identify and analyse the circumstances in which penal interest
is levied.
? procedure for transfer of input tax credit between Central and
State Government
© The Institute of Chartered Accountants of India
  
 
GOODS AND SERVICES TAX 
a
 
 13.2 
 
 
 
1. INTRODUCTION 
In the GST regime, for any intra-state supply, taxes to be paid are the Central GST 
(CGST), going into the account of the Central 
Government and the State GST (SGST)/(UTGST), going 
into the account of the concerned State Government. 
For any inter-state supply, tax to be paid is Integrated 
GST (IGST) having components of both CGST and SGST. In addition, certain 
categories of registered persons will be required to pay to the Government account 
Payment of Tax
Relevant Definitions
Electronic Cash Ledger
Electronic Credit Ledger
Electronic Liability Register
Interest on delayed payment of tax
Transfer of input tax credit
 
CHAPTER OVERVIEW 
© The Institute of Chartered Accountants of India
 
 
 
13.3
PAYMENT OF TAX 
a
a
 
 
13.3 
- tax deducted at source (TDS) and tax collected at source (TCS)
1
. In addition, 
wherever applicable, interest, penalty, fees and any other payment will also be 
required to be made. 
The introduction of E-ledgers is a unique feature under the GST regime. Electronic 
Ledgers or E-Ledgers are of two types. One set is prepared and updated by the 
Taxpayer – Electronic Cash Ledger and Electronic Credit Ledger. Second set is 
prepared and updated on the basis of returns furnished by the Registered person 
or Tax authority i.e. Electronic Liability register. 
Once a taxpayer is registered on common portal (GSTN), two e-ledgers (Cash & 
Input Tax Credit ledger) and an electronic tax liability register will be automatically 
opened and displayed on his dashboard at all times. 
Chapter X of the CGST Act, 2017, prescribes the provisions relating to payment of 
tax containing sections 49 to 53A. Bird’s eye view of coverage under these sections 
is as under-  
? Section 49 discusses the three ledgers namely the electronic cash ledger, 
electronic credit ledger and electronic liability register,  
? Section 49A & 49B discusses about the utilisation of input tax credit and its 
order of utilisation. 
? Section 50 discusses about the interest on delayed payment of tax.  
? Section 51 lays down the circumstances in which tax deduction at source 
(TDS) becomes mandatory.  
? Section 52 deals with the circumstances when tax is to be collected at source 
(TCS) by the Electronic Commerce Operator.  
? Further, the manner of transfer of ITC is laid down in section 53 and  
? Transfer of certain amounts is discussed in section 53A. 
 
1
It may be noted that sections 51 & 52 dealing with provisions relating to TDS & TCS have 
been discussed in detail in chapter-14 in this Module of the Study Material. 
© The Institute of Chartered Accountants of India
  
 
GOODS AND SERVICES TAX 
a
 
 13.4 
Chapter IX of CGST Rules, 2017 containing Rules 85 to 88C deals with provisions 
relating to payment of tax.  Amongst these rules, rule 86A, 86B and 88B have 
already been discussed in detail in Chapter-8: Input tax credit.  Rule 88C will be 
discussed in Chapter-15: Returns. 
Before proceeding to understand the provisions of section 49, 49A, 49B, 50, 53, 53A 
& the relevant rules, let us first go through few relevant definitions. 
2. RELEVANT DEFINITIONS 
? Agent means a person, including a factor, broker, commission agent, arhatia, 
del credere agent, an auctioneer or any other mercantile agent, by whatever 
name called, who carries on the business of supply or receipt of goods or 
services or both on behalf of another [Section 2(5)]. 
? Authorised bank shall mean a bank or a branch of a bank authorised by the 
Government to collect the tax or any other amount payable under this Act 
[Section 2(14)]. 
? Central Tax means the central goods and services tax levied under Section 9 
[Section 2(21)]. 
? Common portal means the common goods and services tax electronic portal 
referred to in section 146 [Section 2(26)]. 
? Council means the Goods and Services Tax Council established under article 
279A of the Constitution [Section 2(36)]. 
? Cess shall have same meaning as assigned to it in the Goods and Service Tax 
(Compensation to States) Act [Section 2(22)].  
? Electronic Cash ledger means the electronic cash ledger referred to in sub-
section (1) of Section 49 [Section 2(43)]. 
? Electronic Credit ledger means the electronic credit ledger referred to in 
sub-section (2) of section 49 [Section 2(46)]. 
Provisions of payment of tax under CGST Act, 2017 have also been made 
applicable to IGST Act, 2017 vide section 20 of the IGST Act, 2017.    
© The Institute of Chartered Accountants of India
13.5
PAYMENT OF TAX 
a
a 
13.5 
? Integrated tax means the integrated goods and services tax levied under the
Integrated Goods and Services Tax Act [Section 2(58)].
? Input tax in relation to a registered person, means 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-section (3) and (4) of
section 5 of the IGST Act;
? the tax payable under the provisions of sub-section (3) and sub-section
(4) of section 9 of the respective State Goods and Services Tax Act; or
? the tax payable under the provisions of sub-section (3) and sub-section
(4) of section 7 of the Union Territory Goods and Services Tax Act,
but does not include the tax paid under the composition levy [Section 2(62)]. 
? Input Tax Credit means the credit of input tax [Section 2(63)].
? Notification means a notification published in the Official Gazette and the
expression “notify” and “notified” shall be construed accordingly
[Section 2(80)].
? Output tax in relation to a taxable person, means the tax chargeable under
this Act on taxable supply of goods or services or both made by him or by his
agent but excludes tax payable by him on reverse charge basis [Section 2(82)].
? Person includes:-
(a) an individual;
(b) a Hindu Undivided Family;
(c) a company;
(d) a firm;
(e) a limited liability Partnership;
© The Institute of Chartered Accountants of India