Utilizing Cash/ ITC for Payment of Demand
1. What is utilization of cash/ ITC for payment of demand or any other amount due about?
It is about payments of non-return related liabilities created through generation of Demand ID which may be reference number of the order or application, appearing in the Electronic Liability Register (Part-II).
2. How can the payments against the liabilities of a particular demand ID be made?
The payments against the liabilities of a particular demand ID can be made by using the following sources:
- Cash balance available in the Electronic Cash Ledger; and/or
- Input tax credit balance available in the Electronic Credit Ledger
3. How does the taxpayer/ Tax Official get to know about outstanding demands?
The taxpayer/ Tax Official can get the information regarding outstanding demands from Electronic Liability Register (Part-II). Details may be fetched regarding a particular demand, as well as for demands raised during a particular period etc.
4. Who can access the functionality of “Utilize cash/ ITC for payment of demand or any other amount due”?
The following persons can have access for the functionality of Utilizing cash/ITC for payment of demand or any other amount due:
- Registered taxpayer having a valid GSTIN or
- Person having temporary id and password or
- GSTP as per the approval process or
- Cancelled taxpayer or
- Authorized/ Jurisdictional tax official
5. What are the pre-conditions for utilization of cash /ITC for payment of demand or any other amount due?
The pre-conditions are:
- Demand ID is already generated and has an outstanding demand to be paid
- User should have valid User ID and password and has necessary access for the same
6. What are the details displayed to the taxpayer after selecting a Demand ID?
The following details are displayed after user selects the Demand ID against which he/she intends to make payment: –
- Outstanding liability towards tax, interest, penalty, fees and Others for Centre/State/UT/Cess against the selected Demand ID
- Balance as per Electronic Cash ledger
- Balance as per Electronic Credit Ledger
- Amount intended to be paid
- Amount to be paid through Cash- As per user declaration
- Amount to be paid through ITC- As per user declaration
7. How is the relief towards reduced penalty available if payment is made within the specified period as per law?
In case the Demand ID is generated under Section 74 of the CGST Act then as per law the system allows reduced payment towards penalty.
A suitable message is shown to the user about the reduction in amount of penalty mentioned in the order, should he make the payment as prescribed in the law,
i. Payment is being made within 30 days from the date of communication of the order; and
ii. The taxpayer is making full payment of tax and interest stated in the order; then
iii. The penalty amount can be paid up to 50% of the amount stated in the order and the balance 50% of the penalty is waived off and a credit entry to that extent is passed by the system automatically in the liability ledger.
8. Can a user make part payment or multiple payments against a particular Demand ID?
Yes, GST Portal allows the user for making part or multiple payments against a particular demand ID till the outstanding balance becomes zero
9. Are there any conditions for a taxpayer to be eligible for waiver of penalty against a Demand ID?
Only if the payment is made against a Demand ID, created under Section 74 of the CGST Act, is made within the specified period of 30 days from the date of communication of the order the taxpayer is eligible for waiver of 50% of the penalty levied in the order under the following conditions:
- The amount of penalty waiver will be considered if the demand included in the order is paid off completely across the Acts.
- If the taxpayer doesn’t pay off the same in full, no entries for waiver of penalty will be posted in the Liability Register.
- Non-payment of any amount included in the demand towards “others” or Fees” won’t be considered towards eligibility of waiver of 50% of the penalty amount.
- This convention will hold for each demand created under the aforesaid section.
- Such entry of waiver of penalty will be tagged against the same demand only for which the payment is being made.
10. How would the taxpayer know that the utilization of cash/ITC has been successful?
On click of “Set-Off” button, if payment is successful, a success message is displayed along with PRN (Payment Reference Number) and all the relevant ledgers get updated.
11. Which ledgers of the taxpayer gets updated on utilization of cash/ITC?
i. On utilization of ITC, Debit entry number is generated and posting is done against that demand ID in Electronic Liability Register Part-II as well as in the Electronic Credit Ledger.
ii. On utilization of Cash, Debit entry number is generated and posting is done against that demand ID in Electronic Liability Register Part-II as well as in the Electronic Cash Ledger.