Meaning of Tax Ledger under GST

Posted on 10 June 2022 Category : GST terms

Term Tax Ledger under GST

The details about Tax Ledger under GST are explained here.

Tax Ledger of Tax Payer:

Tax payers under GST will have their own different tax ledgers.

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.

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.

Types of Electronic Ledgers under GST

E-Cash Ledger:

This ledger will serve as an electronic wallet. Where, the taxpayer needs to make any payment such as tax, interest, penalty etc and he does not have enough credit in his E-Credit ledger, he will have to simply add money to the wallet and the money will be utilized to make the payment.

This ledger will basically reflect all the deposit made in cash using various modes.

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.

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.

E-Liability Ledger:

This ledger will show the total tax liability of a taxpayer after netting off for the particular month. This ledger will be auto populated.

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