Cash balance to be utilised in GSTR-3B

[Pradeep Singhi]

I have two business verticals in single registration. To avoid inter utilisation of credits whether Cash ledger balance can be utilised in GSTR-3B even though if there is input tax credit on portal ?

[Ganeshan Kalyani]

The system allows to offset the credit first and then the cash.

[KASTURI SETHI]

Though the legal status of tax-paid character is same whether paid through Electronic Credit or in cash (Electronic Cash Ledger), yet Govt. prefers payment of tax in cash to Input Tax Credit payment. In real terms and in the eyes of the department, tax paid in cash only is accounted for towards revenue. The payment of tax through Electronic Credit Ledger is only bookish adjustment.

As per GST law there should be no legal hurdle in paying tax in cash, even if having sufficient balance in Electronic Credit Ledger.

[Nandan Khambete]

Balance in electronic Cash ledger can be utilised 1st and then if required, utilise Credit ledger. This is commonly followed by persons who get TDS credit deducted by PSU's and also claim GST Refund due to Zero rated supplies/ exports. I have done this consistently.

[Ganeshan Kalyani]

With due respect what I have experienced is that government portal does auto offset and it utilises the credit balance first and then it goes to cash ledger to offset against the liability. However, on the basis of your views I will check the same.

AI Summary

Cash ledger utilisation allowed in GST returns despite available input tax credit, though portal may auto-offset credit first.
The portal presently auto-offsets GST liabilities by utilising the electronic input tax credit ledger first and then the electronic cash ledger, but there is no legal impediment to paying tax from the cash ledger even if sufficient credit balance exists; some taxpayers choose to use cash first for operational or refund-related reasons, though achieving that sequence may require attention to portal behaviour.