Electronic Cash Ledger Is Merely an ‘E-Wallet’where cash can bedeposited at any time by creating the requisite Challans. : Jharkhand High Court

An electronic Cash Ledger Is Merely an ‘E-Wallet’where cash can be deposited at any time by creating the requisite Challans. : Jharkhand High Court

In the case of M/s RSB Transmissions (India) Limited, Jharkhand High Court held that any deposit in the Electronic Cash Ledger before the due date of filing of GSTR 3B return does not amount to discharge of tax liability on the part of the registered person.

In this case interest of Rs. 13,23,783/- has been levied due to a delay in filing of GSTR-3B returns for the period July 2017 to December 2019, in terms of Section 50 of the CGST Act at the applicable rate whereas the petitioner contended that interest of Rs. 1,53,260/- could believable only on that part of the tax debited from the Electronic Cash Ledger after the due date of filing of GSTR-3B returns which was duly deposited by Form GST DRC-03 dated 06.08.2022.

The Court held that combined reading of Section 49(1) of CGST Act, 2017 and Rule 87(6) and (7) of CGST Rules, 2017 both go to show that such a deposit does not mean that the amount is appropriated towards the Government exchequer. On the hand other, a bare reading of sub-section (3) of Section 49 indicates that such amount available in the Electronic CashLedger is used for making a payment towards tax, interest, penalty, fees, or any other amount under the provisions of the Act and the Rules in the manner prescribed and subject to such conditions as may be prescribed.

As per sub-section (4), the amount available in the Electronic Credit Ledger may be used for making any payment toward output tax under this Act or IGST Act in the manner prescribed and subject to the conditions. Explanation to sub-section (11) of Section 49 also makes it clear that the date of credit to the amount of  Government in an authorized Bank shall be deemed to be the date of deposit in the electronic cash Ledger. Therefore, the deposit in the Electronic Cash Ledger does not amount to payment of the tax liability. If the scheme of the Act and the relevant provisions of Section 39(7) is read in conjunction with the manner of payment of tax prescribed under Section 49, it is clear that any registered person can pay the tax not later than the last date on which he is required to furnish such return. But on the filing of GSTR-3B only, the amount lying in his Electronic Cash Ledger is debited towards payment of tax, interest, or tax liability.

Under the scheme of the Act, no person can make payment of tax before the filing of a GSTR 3B return, though such deposits may be made or are lying in his Electronic Cash Ledger. Tax liability gets discharged only upon the filing of GSTR 3B return, the last date of which is the 20th of the succeeding month on which the tax is due, and even though GSTR-3B return can be filed before the last date and such tax liability can be discharged on its filing, but the mere deposit of amount in the electronic cash Ledger on any date before the filing of GSTR-3B return does not amount to payment of tax due to its State exchequer.

Dismissing the plea of the assessee, the Court concluded that “ Any deposit in the electronic Cash Ledger before the due date of filing of GSTR 3B return does not amount to discharge of tax liability on the part of the registered person. Since the petitioner herein filed its return after some delay for the period July 2017, October 2017, November 2017, and March 2018 i.e. GSTR-3B returns were filed after the 20th day of the succeeding month for which the tax was due, the revenue has rightly computed the interest on such delayed payment and requested the petitioner to pay the amount”