Section 49 of CGST Act, 2017 : Section 49: Payment Of Tax, Interest, Penalty And Other Amounts

Explanation using Example

Imagine a business owner, Mr. Sharma, who runs a furniture manufacturing company. He has recently purchased raw materials from a supplier and paid GST on those purchases. This GST paid can be claimed as input tax credit (ITC).

Mr. Sharma files his monthly GST return and self-assesses his ITC. According to Section 49(2), this ITC is credited to his electronic credit ledger.

Now, Mr. Sharma needs to pay GST for the furniture he sold. He goes to the GST portal and uses the amount in his electronic cash ledger (which he had previously topped up using internet banking as per Section 49(1)) to pay off part of the tax liability. Then, he uses the ITC available in his electronic credit ledger to pay the remaining tax as per Section 49(4).

However, he must follow the order of utilization...

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