Meaning of ITC Ledger of Tax Payer under GST

Posted on 20 April 2023 Category : GST terms

ITC Ledger of Tax Payer under GST

In this article, the information about ITC Ledger of Tax Payer under GST is explained here.

ITC Ledger of Tax Payer:

Input Tax Credit as self-assessed in monthly returns will be reflected in this ledger. The credit of this ledger can be used for payment of TAX ONLY and not for payment of interest, fines, fees etc.

Electronic ITC ledger:

Under GST, the emphasis is on simplifying administrative procedures and bringing transparency in the system. India is moving towards digitization and the same idea has been captured by lawmakers while drafting the GST bill.

Each registered taxpayer will get a profile created on the government’s GST website. The taxpayer using the login credentials will be able to access all features along with a dashboard. All the taxpayers will also get three electronic ledgers namely E-cash Ledger, E-credit Ledger & E-liability Ledger. These ledgers will reflect the amount of tax payable, input credit balance, and on adding money to the cash ledger the taxpayer will also be able to settle the tax liability online.

E-Credit Ledger:

The input tax credit that is self-assessed in the monthly returns will be reflected here under three categories i.e IGST, CGST & SGST. The taxpayer will be able to utilize the balance shown in this account only for payment of tax as per the credit utilization rules and no other amount such as interest, penalty etc.

ITC as self-assessed in monthly return will be reflected here. The credit in this ledger can be used to make payment of Tax only and no other amounts such as interest, penalty, fees etc.

Manner of Utilization of Input Credit:

The E-Credit ledger will show the input credit under the three major tax heads namely IGST, CGST & SGST. As explained in the figure, to pay IGST input credit can be taken first from IGST, balance can be settled using input from CGST and then SGST and so on. This ledger will help taxpayers determine the status of amount that can be claimed as input while settling tax liability.

The information on ITC Ledger of Tax Payer under GST is detailed above. Comment below your thoughts on ITC Ledger of Tax Payer under GST

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