Maintenance of Electronic Credit Ledger by Persons Eligible for ITC:
The electronic credit ledger shall be maintained in FORM GST PMT-02 for each registered person eligible for input tax credit under the Act on the common portal and every claim of input tax credit under the Act shall be credited to the said ledger.
Debits in Ledger:
The electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the provisions of Section 49 or Section 49A or Section 49B.
Refunds of ITC to be debited in Ledger:
Where a registered person has claimed refund of any unutilized amount from the electronic credit ledger in accordance with the provisions of Section 54, the amount to the extent of the claim shall be debited in the said ledger
Rejection of refund of ITC claim – Re-Credit in Ledger:
If the refund so filed is rejected, either Fully or partly, the amount debited under Rule 86(3), to the extent of rejection, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03
Re-Credit in ledger:
Where a registered person has claimed refund of any amount paid as tax wrongly paid or paid in excess for which debit has been made from the electronic credit ledger, the said amount, if found admissible, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03.
No Direct Entry in Ledger:
Save as provided in the provisions of this Chapter, no entry shall be made directly in the electronic credit ledger under any circumstance.
Specific order and restrictions for utilizing ITC
- Credit of IGST- It can be utilised against all any tax liability in this order – IGST, CGST or SGST/UTGST.
- Credit of CGST – It cannot be utilised for payment of SGST. It can be set-off in the following order – CGST, IGST.
- Credit of SGST/UTGST- It cannot be utilised for payment of CGST. SGST can be set-off in the following order – SGST/UTGST, IGST.
Illustration:
Mr Santosh has an ITC of Rs 35000. The breakup of ITC is-
| Particulars | Amount |
|---|---|
| IGST | 18,000 |
| CGST | 7,000 |
| SGST | 10,000 |
The IGST Liability is Rs 30,000. The IGST credit of Rs 18,000 will be entirely used to set off this liability. The balance IGST is paid in cash of Rs 12,000 which reflects in the Electronic Cash Ledger.
In case of CGST the credit of Rs. 7,000 will be set off against liability of Rs. 10,000 and CGST of Rs. 3,000 has to be paid. The SGST payable is equal to the credit of SGST available. This means no SGST has to be paid by Mr Santosh.
