TaxTMI 
TaxTMI 
It is requested to guide regarding any circular, notification or any other direction by Government of India which states that 5% of the gross tax liability to be compulsorily paid from cash ledger while filing gst returns.
Issue regarding discharge of gross tax liability while filing gst returns
01 Apr 2024 
15 Replies 
1309 Views Asked by
GST ITC utilisation flagged as a risk indicator triggers enquiry rather than a compulsory specific cash-payment requirement.
No general statutory rule requires taxpayers to pay a fixed share of gross GST liability from the cash ledger at return filing; restrictions on using electronic credit are governed separately and flagged high ITC-to-cash ratios are treated administratively as risk parameters prompting enquiry. A State circular directed that disproportionate ITC utilisation be handled through prescribed ASMT/DRC procedural steps-archival where isolated, solicitation of taxpayer replies, recording cases as requiring detailed investigation, and issuing nil-demand orders when quantification is not possible-rather than as a basis for immediate cash-payment demands. Specific sectoral notifications may impose particular cash-treatment limits for designated supplies. (AI Summary)
No general statutory rule requires taxpayers to pay a fixed share of gross GST liability from the cash ledger at return filing; restrictions on using electronic credit are governed separately and flagged high ITC-to-cash ratios are treated administratively as risk parameters prompting enquiry. A State circular directed that disproportionate ITC utilisation be handled through prescribed ASMT/DRC procedural steps-archival where isolated, solicitation of taxpayer replies, recording cases as requiring detailed investigation, and issuing nil-demand orders when quantification is not possible-rather than as a basis for immediate cash-payment demands. Specific sectoral notifications may impose particular cash-treatment limits for designated supplies. (AI Summary)