Section 49 of CGST Act: Payment of Tax, Interest, Penalty and Other Amounts

Section 49(1) - Electronic Cash Ledger

Every deposit made towards tax, interest, penalty, fee or any other amount through the prescribed payment modes, and subject to the prescribed conditions and restrictions, is credited to the electronic cash ledger of the person.

Section 49(2) - Electronic Credit Ledger

Input tax credit self-assessed in the return of a registered person is credited to the electronic credit ledger in accordance with Section 41 and is maintained in the prescribed manner.

Section 49(3) - Use of Electronic Cash Ledger

The amount available in the electronic cash ledger may be used for payment of tax, interest, penalty, fee or any other amount payable under the CGST Act or the rules, subject to the prescribed manner, conditions and time.

Section 49(4) - Use of Electronic Credit Ledger

The amount available in the electronic credit ledger may be used towards payment of output tax under the CGST Act or the Integrated Goods and Services Tax Act, 2017, subject to the prescribed manner, conditions, restrictions and time.

Section 49(5) - Basic Cross-Utilisation Rules for ITC

1. IGST credit is first used for IGST; the balance may be used for CGST and SGST/UTGST in the applicable order.
2. CGST credit is first used for CGST and the balance may be used for IGST.
3. SGST credit is first used for SGST and the balance may be used for IGST. SGST credit is used for IGST only where the balance of CGST credit is not available for payment of IGST.
4. UTGST credit is first used for UTGST and the balance may be used for IGST. UTGST credit is used for IGST only where the balance of CGST credit is not available for payment of IGST.
5. CGST credit cannot be used for payment of SGST or UTGST.
6. SGST or UTGST credit cannot be used for payment of CGST.

Section 49(6) - Refund of Ledger Balance

The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or other amounts may be refunded in accordance with Section 54, subject to the conditions governing the particular refund claim.

Section 49(7) - Electronic Liability Register

All liabilities of a taxable person under the CGST Act are recorded and maintained in an electronic liability register in the prescribed manner.

Section 49(8) - Order of Discharge of Tax and Other Dues

Tax and other dues are discharged in the following statutory order:

1. self-assessed tax and other dues relating to returns of previous tax periods;
2. self-assessed tax and other dues relating to the return of the current tax period; and
3. any other amount payable under the Act or rules, including a demand determined under Section 73, Section 74 or Section 74A.

The reference to Section 74A in clause (c) has applied from 1 November 2024. Section 74A is the demand provision applicable to determination of tax for Financial Year 2024-25 onwards.

Section 49(9) - Presumption of Passing on Tax Incidence

A person who has paid tax on goods or services or both is presumed, unless the contrary is proved, to have passed on the full incidence of that tax to the recipient. This principle is relevant to the statutory scheme concerning unjust enrichment and refunds.

Explanation to Section 49

The date on which the amount is credited to the Government account in the authorised bank is treated as the date of deposit in the electronic cash ledger. For this section, tax dues means tax payable under the Act and excludes interest, fee and penalty; other dues means interest, penalty, fee or any other amount payable under the Act or rules.

Section 49(10) - Transfer of Electronic Cash Ledger Balance

A registered person may, on the common portal and subject to prescribed conditions and restrictions, transfer an available amount of tax, interest, penalty, fee or other amount in the electronic cash ledger to the electronic cash ledger for:

1. IGST, CGST, SGST, UTGST or cess; or
2. IGST or CGST of a distinct person specified in Section 25(4) or Section 25(5).

A transfer to a distinct person under clause (b) is not permitted where the transferring registered person has an unpaid liability in the electronic liability register. Such transfer is deemed to be a refund from the electronic cash ledger under the Act.

Section 49(11) - Deemed Deposit after Transfer

Where an amount is transferred to the electronic cash ledger under the Act, it is deemed to have been deposited in that ledger as provided in Section 49(1).

Section 49(12) - Restriction on Discharge through Electronic Credit Ledger

Notwithstanding anything contained in the Act, the Government may, on the recommendations of the GST Council and subject to conditions and restrictions, specify the maximum proportion of output tax liability under the CGST Act or IGST Act that may be discharged through the electronic credit ledger by a registered person or a prescribed class of registered persons.