GST payment occurs only on appropriation to the Government; delayed debit attracts interest and composite period orders fail.

Deposit of tax in the electronic credit ledger under the reverse charge mechanism does not, by itself, constitute payment of GST; payment is complete only on appropriation to the Government exchequer, and delayed appropriation attracts interest. Input tax credit taken before such appropriation is legally premature, but the independent recovery and penalty consequences required reconsideration on the facts, including whether there was suppression or mere omission. A composite assessment and penalty order covering two separate tax periods was held unsustainable and was set aside, with the matter remitted for fresh, separate orders for each period.

---

---

Issues: (i) whether mere deposit of tax amounts in the electronic credit ledger under the reverse charge mechanism amounted to payment of GST, and whether interest was payable for delayed appropriation to the Government; (ii) whether input tax credit availed before appropriation to the Government could be recovered and penalised; (iii) whether a composite assessment and penalty order covering two tax periods could be sustained.

Issue (i): whether mere deposit of tax amounts in the electronic credit ledger under the reverse charge mechanism amounted to payment of GST, and whether interest was payable for delayed appropriation to the Government

Analysis: Deposit of cash into the electronic credit ledger does not, by itself, amount to discharge of tax. Payment is completed only when the amount is appropriated to the Government exchequer. On the admitted facts, the tax amounts were eventually debited to the Government account, but only after the stipulated time. The delay in appropriation therefore attracted liability to interest for the period of delay.

Conclusion: The tax was not treated as paid in time, and interest for delayed payment was payable against the assessee.

Issue (ii): whether input tax credit availed before appropriation to the Government could be recovered and penalised

Analysis: Input tax credit could be availed only after the underlying tax payment stood properly appropriated. The assessee's earlier availment of credit was therefore not correct. However, once the tax liability was later discharged by debit entries, the order directing independent recovery of the credit, apart from appropriation of the tax already paid, was not sustainable on the facts found. The question whether the conduct amounted to suppression of facts or was merely an inadvertent omission required factual reconsideration by the primary authority.

Conclusion: The finding of wrongful availment was accepted only to the extent of the legal infirmity, but the recovery and penalty treatment required reconsideration and were not finally sustained as framed.

Issue (iii): whether a composite assessment and penalty order covering two tax periods could be sustained

Analysis: The impugned order covered two distinct tax periods in a single composite exercise. Such a composite determination was not permissible and necessitated separate consideration for each period.

Conclusion: The composite order was unsustainable and had to be set aside.

Final Conclusion: The matter was sent back for fresh, separate orders for the two tax periods, while the legal position on delayed appropriation and consequential interest remained against the assessee.

Ratio Decidendi: Deposit in an electronic credit ledger does not amount to payment of GST unless and until the amount is appropriated to the Government, and a composite order covering distinct tax periods cannot be sustained.

---