# Payment of Tax under GST — The Three Electronic Ledgers

GST is a fully electronic tax. Every taxpayer has three ledgers maintained on the GST common portal:

Ledger	What it shows
A. Electronic Cash Ledger	Cash balance of the taxpayer with the Department
B. Electronic Credit Ledger	Input Tax Credit (ITC) balance with the Department
C. Electronic Liability Ledger	Liabilities of the taxpayer towards the Department

## A. Electronic Cash Ledger

Divided into 4 Major Heads × 5 Minor Heads each:

Major Heads →	IGST	CGST	SGST/UTGST	Cess
Minor Heads ↓	Tax	Tax	Tax	Tax
	Interest	Interest	Interest	Interest
	Penalty	Penalty	Penalty	Penalty
	Fees	Fees	Fees	Fees
	Others	Others	Others	Others

### Modes of Deposit

1. Credit / Debit Card

2. UPI

3. Internet Banking

4. NEFT / RTGS / IMPS

5. Over-the-Counter (OTC) deposit at a bank

### Important Terms (Challans & Codes)

PMT-06: The form for the E-challan under GST. E-challan is valid for 15 days.
CPIN (Common Portal Identification Number): 14-digit number generated for every challan on the portal.
CIN (Challan Identification Number): 17-digit number generated by the bank on completion of payment = 14-digit CPIN + 3-digit Bank Code.
BRN (Bank Reference Number): Transaction number given by the bank for payment against the challan.
E-FPB (Electronic Focal Point Branch): A branch of an authorised bank authorised to collect GST payments for the government.

### OTC Deposit Limit

Maximum ₹10,000 per challan per tax period can be deposited via OTC. Exceptions (no ₹10,000 cap):

Government department or persons notified by the Commissioner
Proper officer / authorised officer recovering dues during investigation (including recovery through sale of property)

### Key Rules

Amount deposited is credited to the E-cash ledger and can be used to pay any liability.
Amount in one major / minor head cannot directly be used to pay liability under another head.
Form PMT-09: A registered person can transfer balance between heads using PMT-09; after transfer it can be used for any liability.
Inter-PAN transfer: A registered person can transfer balance in E-cash ledger of IGST or CGST to a distinct person's E-cash ledger (IGST/CGST) — only if no liability in his own E-liability ledger.
Refund claimed is debited to E-cash ledger; if rejected, it is re-credited.

### Cash Ledger — Debits & Credits

Debit (↓)	Credit (↑)
Amount utilised for payment of liability	Amount deposited into the ledger
Refund claimed	Refund claim rejected (re-credit)
Transfer of balance OUT to another head/person	Transfer of balance IN from another head/person; TDS/TCS credit

## B. Electronic Credit Ledger

Debit (↓)	Credit (↑)
ITC utilised for payment of output tax liability	ITC availed on inward supplies (self-assessed)
Refund claimed from credit ledger	Refund claim rejected (re-credit)

### Crucial Restrictions

ITC in the credit ledger can be used ONLY to pay OUTPUT TAX.
Interest, penalty, fees, RCM liability etc. MUST be paid only through E-cash ledger — never through ITC.
ITC can be utilised to pay any output tax liability, whether self-assessed in returns or arising from a proceeding initiated under GST.

## C. Electronic Liability Ledger

Debit (↓)	Credit (↑)
Any self-assessed liability	Any payment made from E-cash ledger
Any demand raised by the department	Any amount utilised from E-credit ledger

### Order of Discharge of Liabilities (Mandatory Sequence)

Liabilities sitting in the E-liability ledger must be discharged in this strict order:

1. Self-assessed tax and other dues for previous tax periods

2. Self-assessed tax and other dues for the current tax period

3. All other dues including demand determined under section 73, 74 or 74A

## Quick Summary Map

Type of Liability	Can be paid through E-Credit Ledger?	Must be paid through E-Cash Ledger?
Output tax (forward charge)	✓ Yes	✓ Optional
RCM liability	✗ No	✓ Yes (mandatory)
Interest	✗ No	✓ Yes (mandatory)
Penalty	✗ No	✓ Yes (mandatory)
Late Fees	✗ No	✓ Yes (mandatory)

Worked example

### Example 1

OTC Limit Example

Mr. X wants to deposit ₹25,000 by cash at the bank counter in October. Allowed?

A: No. Maximum ₹10,000 per tax period can be deposited via OTC. He must use internet banking / NEFT / RTGS / UPI / cards for the balance. The ₹10,000 cap does not apply if he is a government department or if recovery is being done by a proper officer during investigation.

### Example 2

Cross-head Transfer Example

Mr. Y has ₹50,000 lying under 'CGST — Tax' minor head but needs to pay 'IGST — Tax' of ₹40,000.

A: He cannot directly utilise CGST cash balance for IGST. He must first transfer using Form PMT-09 from 'CGST — Tax' to 'IGST — Tax' and then make the payment.

### Example 3

Liability Discharge Order Example

Mr. Z has outstanding for August (self-assessed ₹20,000), September current period (self-assessed ₹30,000), and a demand under section 73 of ₹25,000. He has only ₹50,000 available across credit + cash ledgers.

A: The discharge order is:

First: ₹20,000 for previous tax period (Aug) self-assessed.
Then: ₹30,000 for current tax period (Sept) self-assessed.
No funds remaining for the section 73 demand — it remains unpaid.

⚠️ Common exam mistakes

Paying interest, penalty, late fee, or RCM tax from the Electronic Credit Ledger — these MUST come from the Cash Ledger.
Believing balance under one minor head (say, CGST-Interest) can be used directly for another (say, CGST-Tax) — it cannot; PMT-09 transfer is required first.
Confusing CPIN (14 digits, portal-generated) with CIN (17 digits, bank-generated).
Depositing more than ₹10,000 OTC for a non-exempted person.
Not following the strict 1-2-3 order of discharge — previous period, current period, then demands.
Forgetting that E-challan (PMT-06) has only a 15-day validity.
Assuming ITC of one taxpayer can be transferred to another — only CASH ledger balance (IGST/CGST) can be transferred between distinct persons of the same PAN, and only if no liability is outstanding.

Reference: Section 49 of CGST Act, 2017 read with Rules 86, 87 of CGST Rules — CGST Act, 2017

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Payment of Tax: Electronic Cash, Credit and Liability Ledgers

Worked example

⚠️ Common exam mistakes