Mechanism Introduced For Intra-Head, Inter-Head Transfer of Funds in Electronic Cash Ledger

By Sh. Rajesh K. Arora,
Superintendent (Retd.), GST, C.Ex. & CUSTOMS

The subject issue of wrong deposition of amount of Central Excise duty/ Service Tax, under the Interest or Penalty Head or vice versa, has been a complex issue, in the erstwhile Central Excise and Service regime i.e pre-GST Era, which was being faced by both the taxpayers and the tax department. The said wrong deposition of the amount may be due to ignorance or typing error or due to human error. However, there were certain provisions regarding transfer of the said wrongly deposited amount but that exercise/mechanism was not entrusted to or at the end of the taxpayers and rather the same was entrusted with the department. The correction of that error/mistake was a herculean task. 

Now in GST regime, the registered taxpayer, deposit money by way of challans mentioning a particular head, the said amount is credited in that particular head in the Electronic Cash ledger. As and when the need for discharging their tax liabilities arises, the registered taxpayers debit that particular major head i.e. IGST, CGST, SGST/UTGST and Cess or minor head i.e. Tax, Interest, Penalty, Fee and others in the Electronic cash ledger.

But again, due to mistake/ignorance/human error, the taxpayer mentions wrong head in the challans and, therefore, the said deposited amount under wrong head, cannot be utilized for discharging the tax liabilities for a particular head, since the amount has been deposited in a wrong head. In such a scenario, the only option left with the taxpayers, is to claim the refund of the said amount, which has been deposited under wrong head, by way of filing a refund application in FORM RFD-01 under the category “Excess balance in electronic cash ledger”.

Unlike the mechanism in the Pre-GST Era i.e. in erstwhile Central Excise and Service regime, the Government has now brought into a mechanism for correcting the heads i.e transferring the amount deposited in wrong head to another correct head. The operation of this mechanism lies in the hands of the taxpayers and not with the department, as was the case in the pre-GST Era. The Government has brought into a mechanism in the form of form GST PMT-09, available on GST portal, which allows the taxpayer to perform intra-head or inter-head transfer of excess amount (deposited in wrong head) available in Electronic Cash Ledger. A taxpayer can avail this facility by way of filing GST PMT-09 for transfer of the amount of tax, interest, penalty, fee or others, deposited wrongly in the head i.e other than the correct available head in the Electronic Cash Ledger. The taxpayers through filing of GST PMT-09, can make multiple transfers from more than one Major/Minor head to another Major/Minor head.  

The CBIC notified 21st April, 2020 as an effective date for operating Rule 87(13) of Central Goods and Service Tax Rules and Form GST PMT-09. This facility is effective from 21st April, 2020 as detailed vide Notification no. 37/2020–Central Tax dated 28th April, 2020. Earlier the CBIC introduced the above rule in respect of inter transfer of funds available in Electronic cash ledger. Prior to this notification the corresponding rule 87(13) of Central Goods and Service Tax Rules was not effective. Accordingly, prior to this notification, a taxpayer depositing any amount under a major head i.e. Integrated tax, Central tax, State/UT tax, and Cess or minor head i.e. Tax, Interest, Penalty, Fee and Others, then they could utilized the said amount for discharging their liabilities only under that corresponding particular major head and minor Head respectively. Accordingly, they were required to deposit the amount only under a particular Head to discharge their existing liabilities for respective head only.

After this notification, that is with effect from 21st April, 2020, Form GST PMT-09 on the GST portal, allows the taxpayers to make Intra-Head and Inter-Head transfer of amount deposited by them, in the wrong Head, and available in their Electronic Cash Ledger. Thus, with effect from 21st April, 2020, this mechanism can be used for transferring wrongly deposited amount available in Electronic Cash Ledger from minor head ‘tax’ under major head ‘cess’ to minor head ‘interest’ under major head ‘CGST’ or for transferring amount from minor head ‘Interest’ under major head ‘IGST’ to minor head ‘Tax’ under same major head ‘IGST’. In this mechanism, the taxpayers while filing Form GST PMT-09, can select more than one major/minor heads while transferring amount from one head to another, one at a time. Moreover, the taxpayer can add more than one major/minor head using Add Record option before clicking PROCEED TO FILE.

The registered taxpayers while filing Form PMT-09, are required to login on GST portal with valid credentials and navigate to Services > Ledgers > Electronic Cash Ledger > File GST PMT-09 For Transfer of Amount option. After Form GST PMT-09 is filed, ARN is generated on successful filing of the same. The taxpayer can view/download Form GST PMT-09 in PDF format before filing the same on the GST Portal. This Form GST PMT-09 can be filed using DSC or EVC. Once Form GST PMT-09 is filed, the taxpayer will receive SMS and e-mail on his registered e-mail ID and Mobile number. After successful filing of Form GST PMT-09, elctronic Cash ledger will get updated. Filed form GST PMT-09 will be available for view/download in PDF format and for downloading the same, the taxpayers are required to navigate to Services > Ledgers > Electronic Cash Ledger > View Filed GSTPMT-09 > DOWNLOAD GST PMT-09(PDF) option.

The format of FORM GST PMT–09 {Rule 87(13)}is as under:
Transfer of amount from one account head to another in electronic cash ledger

5.   Details of the amount to be transferred from one account head to another

                            (Amount in Rs.)

6.   Verification 
I hereby solemnly affirm and declare that the information given herein above is true and correct to the best of my knowledge and belief and nothing has been concealed therefrom.

Signature
Name of Authorized Signatory
Designation /Status

Place
Date

Instructions -

1.   Major head refers to - Integrated tax, Central tax, State/UT tax and Cess.

2.   Minor head refers to – tax, interest, penalty, fee and others.

3. The form may be filled up if amount from one major / minor head is intended to be transferred to another major/minor head. Minor head for transfer of amount may be same or different. 

4. The amount from one minor head can also be transferred to another minor head under the same major head.

5. Amount can be transferred from the head only if balance under that head is available at the time of transfer.]

Disclaimer: The views expressed in the article are in the opinion of the author. Although due care has been taken while preparing this article, but some error may creep in and accordingly before taking any action on the basis of this article, it is highly recommended to take note of the GST law first. There is no liability for any loss or damage caused to anyone due to any interpretation or omission.