Payment of GST through DRC-03 using input tax credit balance

-

Utilisation of the amounts available in the electronic credit ledger for payment of tax and other liabilities.

Payment of GST using DRC-03 using ITC balance

CBIC vide Circular No. 172/04/2022-GST dated 06th July 2022 issued clarification on this subject. 

Here is the text of the circular:

1.In  terms  of sub –section  (4)  of  section 49 of CGST Act, the amount available in the electronic credit ledger may be used for making any payment towards output tax under the CGST Act or the Integrated Goods   and   Services   Tax   Act,   2017(hereinafter referred to as “IGST Act”),subject  to  the  provisions  relating  to  the order of utilisation of input tax credit as laid  down  in  section  49B  of  the  CGST Act  read  with  rule  88A  of  the  CGST Rules. 

2.Sub-rule  (2)  of  rule  86  of  the  CGST Rules   provides for   debiting   of   the electronic  credit  ledger  to  the  extent  of discharge  of  any  liability  in  accordance with  the  provisions  of  section  49  or section 49A or section 49B of the CGST Act.

3.Further,   output   tax   in   relation   to   a taxable  person  (i.e.  a  person  who  is registered or liable to be registered under section  22  or  section  24  of  the  CGST Act) is defined in clause (82)of section 2 of the CGST Act as the tax chargeable on taxable supply of goods or services or both but excludes tax payable on reverse charge mechanism.

4.Accordingly,  it  is  clarified  that  any payment towards output tax, whether-
  • self-assessed in  the  return  or  
  • payable as  a  consequence  of  any  proceeding instituted under the provisions of GST Laws, 
can  be  made  by  utilization  of the amount available in the electronic credit ledger of a registered person.  In nutshell you can use ITC balance for paying tax using DRC-03 as well.

5.It is further  reiterated  that as output  tax does   not   include   tax   payable   under reverse   charge  mechanism, implying thereby  that  the  electronic  credit  ledger cannot  be  used  for  making  payment  of any  tax  which  is  payable  under  reverse charge mechanism (RCM).

Can we use ITC balance for paying interest, penalties etc?

ITC balance can not be used for making payment  of  any  interest,  penalty,  fees  or  any other  amount   payable   under   the   said   acts. 
Similarly,  electronic  credit  ledger  cannot  be used    for    payment    of    erroneous    refund sanctioned  to  the  taxpayer,  where  such  refund was sanctioned in cash.

Comments

Post a Comment

Popular posts from this blog

PF payment due dates for the FY 2020-21 for tax audit reporting

-
Image
PF payment due dates for the FY 2020-21 for the purpose of tax audit reporting While preparing Tax Audit Report in Form 3CD it is important to fill due date of payment to various Employees contribution fund and actual payment of the contribution. i.e  "Details of contributions received from employees for various funds as referred to in section  36(1)(va)" Most commonly reported funds under the clause are EPF and ESIC. If there is delay in the payment of the contributions of PF and ESI may result in disallowance of the payment of contribution. Here is the chart of the due dates under EPF and ESIC for the FY 2020-21 for quick reference  PF payment due dates for the FY 2020-21 Period Due date Day Extended date Reference Apr-20 15/05/2020 Friday                                -                           -   May-20 15/06/2020 Monday                  
Continue Reading

PF payment due dates for the FY 2021-22 for reporting u/s 36(1)(va)

-
Image
PF payment due dates for the FY 2021-22 for the purpose of tax audit reporting Reporting under clause 20 (b) of Form 3CD requires due dates of payment to various Employees contribution fund. i.e  "Details of contributions received from employees for various funds as referred to in section  36(1)(va) " Here " due date " means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise. Most commonly reported funds under the clause 20(b) are EPF and ESIC. If there is delay in the payment of the contributions of PF and ESI result in disallowance of the payment of contribution. Here is the chart of the due dates under EPF and ESIC for the FY 2021-22 for quick reference. PF payment due dates for the FY 2021-22 Period Due date Day
Continue Reading

Format of shorter notice consent for AGM (Annual General Meeting)

-
Image
Format of shorter notice consent for AGM (Annual General Meeting) Background The Companies Act mandates companies to issue a notice to members calling a general meeting at least 21 clear days before the date of the meeting. Sometimes, the matters in urgency require quick decision making and in such circumstances, the companies may go for calling general meetings at shorter notice. However, in case of the private limited companies the period can be less than 21 days as provided in the Articles of Association (AOA). Provision and Rule As per the provisions of Section 101 (1) of the Companies Act, 2013, every general meeting of a company may be called by giving not less than twenty-one days clear notice in writing or through electronic mode in such manner as provided under Rule 18 of Companies (Management and Administration) Rules 2014. What is Consent for shorter notice? It is permission obtained by the company from its shareholders, in advance, to call a general meeting at an earlier da
Continue Reading

PF payment due dates for the FY 2022-23 for reporting u/s 36(1)(va)

-
Image
PF payment due dates for the FY 2022-23 for the purpose of tax audit reporting Reporting under clause 20 (b) of Form 3CD requires due dates of payment to various Employees contribution fund. i.e  "Details of contributions received from employees for various funds as referred to in section  36(1)(va) " Here " due date " means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise. Most commonly reported funds under the clause 20(b) are EPF and ESIC. If there is delay in the payment of the contributions of PF and ESI result in disallowance of the payment of contribution. Here is the chart of the due dates under EPF and ESIC for the FY 2022-23 for quick reference. PF payment due dates for the FY 2022-23 Period Due Date Day Extended D
Continue Reading

Letter of Authority for Tax Practitioners (Income tax)

-
Image
Letter of Authority for Tax Practitioners (Income Tax) LETTER OF AUTHORITY I/We ________________ , Proprietor/Partner/Director of _______________________ , hereby authorize Mr./Mrs./CA __________________________ to appear, represent, and settle on my/our behalf the Income tax assessment proceedings before the Income Tax Officer / Assistant/Dy. / Commissioner of Income Tax or in appeal before the Appellate Assistant Commissioner of Income Tax, Commissioner of Income Tax (Appeal), or the Appellate Tribunal or the Board of Direct Taxes for the assessment year 20XX-XX . [to produce accounts and documents/statements and to receive on my/our behalf any notice or documents/statements issued in connection with the said proceedings] or/and [to apply for, obtain, and receive refund orders in respect of the said assessment (if any)] or/and [to apply for copies of the Income Tax assessment
Continue Reading