From 05.07.2022, it will be now possible to transfer amount from one Electronic Cash Ledger to another Electronic Cash Ledger between the distinct persons
Now question is what is meaning of distinct person?
Where more than one registration under GST has been taken in single pan, then each such person shall be treated as distinct persona as per section 25 of CGST Act 2017.
Let’s understand this amendment in detailed
- Sub Section (10) Section-49 of CGST Act 2017 has been amended by Section 110 of Finance Act 2022.
- Not this amendment comes in force from 05-07-2022 by way of this notification no 09/2022 Central Tax dated 05.07.2022
- So now lets understand what is amendment in sub section 10 of Section 49 of CGST Act 2017
This amendment can be explained by following table
| At present | After the effect of amendment |
| Amount of tax, interest, penalty, fees or any other amount in Electronic Cash Ledger can be transferred amongst form one tax to another tax in GST e.g from CGST to IGST etc | Amount of tax, interest, penalty, fees or any other amount in Electronic Cash Ledger can be transferred amongst form one tax to another tax in GST e.g from CGST to IGST etc IGST and CGST can be transferred from one GSTN to another GSTN of the same PAN. In other words between distinct person under Section 25(4) and 25(5) of CGST Act 2017 |
Analysis
- At present any amount in form of tax, interest, penalty, fees or any other amount can be transferred from CGT to IGST, SGST, UTGST or CESS or it can be transferred from any tax to anther tax in GST in any manner.
- But if more than one registration in GST taken on same PAN, then it is not possible at present to transfer the amount from Electronic Cash Ledger of one GSTN to Electronic Cash Ledger to another GSTN even both GSTN are on same PAN.
- So now w.e.f 05.07.2022 it allowable to transfer CGST and IGST from Electronic Cash Ledger of one GSTN to Electronic Cash Ledger of another GSTN of the same PAN.
- However, this relaxation is given only for CGST and IGST. Means amount in form of late fees, penalty or any other amount will not be a transferred from Electronic Cash Ledger of one GSTN to Electronic Cash Ledger to another GSTN
Conclusion
This is very welcome change, some time it happens that Electronic Cash Ledger of one GSTN is full of money and another one is empty and liability to pay tax is in another GSTN. So now this problem is resolved as taxpayer will be able to transfer the amount from one cash ledger to another cash ledger any time.
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