M/S MN Ltd has a balance of 30,000 as CGST and - 30,000 SGST in the electronic credit ledger in the beginning of April 2024. During the month of…

The electronic credit ledger can be used for making payment of only output tax which is the tax chargeable on taxable outward supply, but excludes tax payable on reverse charge mechanism. It cannot be used for making payment of any interest, penalty, fees or any other amount payable under the GST law. Accordingly, electronic credit ledger can be used for any payment towards output tax, whether self-assessed in the return or payable as a consequence of any proceeding instituted under the GST law. Thus, in view of the above-mentioned provisions, the contention of MN Ltd. is not correct. Computation of amount payable in cash is as under: - Particulars CGST (₹) SGST (₹) GST payable on outward supplies 10,000 10,000 GST payable as consequence of proceeding instituted under GST law 5,000 5,000 Total 15,000 15,000 Less: ITC in Electronic Credit ledger (15,000) (15,000) Balance Nil Nil Add: GST payable on reverse charge supplies 6,000 6,000 Add: Interest for default in late filing of GSTR-3B 500 500 Add: Penalty 500 500 Total amount payable in cash 7,000 7,000