Registered Person under GST need not mandatorily utilise TDS or TCS amount credited to electronic cash ledger only for discharging GST liability, clarifies CBIC [Read Circular]

The Central Board of Indirect Taxes and Customs (CBIC) has clarified that Registered Person under GST need not mandatorily utilise TDS or TCS amount credited to electronic cash ledger only for discharging GST liability.

“Various representations have been received from taxpayers and other stakeholders seeking clarification in respect of certain issues relating to refund,” the CBIC said.

One of the issues raised was whether refund of TDS/TCS deposited in electronic cash ledger under the provisions of section 51 /52 of the CGST Act can be refunded as excess balance in cash ledger.

The CBIC clarified that the amount deducted/collected as TDS/TCS by TDS/ TCS deductors under the provisions of section 51 /52 of the CGST Act, as the case may be, and credited to electronic cash ledger of the registered person, is equivalent to cash deposited in electronic cash ledger. It is not mandatory for the registered person to utilise the TDS/TCS amount credited to his electronic cash ledger only for the purpose for discharging tax liability. The registered person is at full liberty to discharge his tax liability in respect of the supplies made by him during a tax period, either through debit in electronic credit ledger or through debit in electronic cash ledger, as per his choice and availability of balance in the said ledgers.

“Any amount, which remains unutilized in electronic cash ledger, after discharge of tax dues and other dues payable under CGST Act and rules made thereunder, can be refunded to the registered person as excess balance in electronic cash ledger in accordance with the proviso to sub-section (1) of section 54, read with sub-section (6) of section 49 of CGST Act,” the Board said.

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