Businesses allowed to encash tax credits for improving liquidity


New Delhi, Nov 19 (IANS): In order to improve liquidity of businesses, the Central Board of Indirect Taxes and Customs (CBIC) has decided to allow full transfer of cash balances in electronic ledgers to taxpayers after they has paid their tax dues.

In a circular, the CBIC has said that the amount deducted/collected as TDS/TCS by deductors under the provisions of section 51/52 of the CGST Act and credited to the electronic cash ledger of the taxpayer, is equivalent to cash deposited in the electronic cash ledger.

Thus, it is not mandatory for taxpayers to utilise the TDS/TCS amount credited to his electronic cash ledger only for the purpose for discharging tax liability.

The board said that a GST registered person is at full liberty to discharge his tax liability in respect of the supplies made by him during a tax period, either through debit in electronic credit ledger or through debit in electronic cash ledger, as per his choice and availability of balance in the said ledgers.

The circular added that any amount, which remains unutilised in electronic cash ledger, after discharge of tax dues and other dues payable under CGST Act can be refunded to the registered person as excess balance.

Thus, the money refunded to taxpayers would not be blocked for use only in discharging future and other tax liabilities but can be used for furthering the business.

The clarification of the board is expected to provide big relief to businesses as it would unlock a lot of funds for them for use in furthering business objectives. Earlier, refund money got blocked in the electronic cash ledgers of taxpayers that could only be used for settling tax dues.

 

  

Top Stories


Leave a Comment

Title: Businesses allowed to encash tax credits for improving liquidity



You have 2000 characters left.

Disclaimer:

Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. Daijiworld.com will not be responsible for any defamatory message posted under this article.

Please note that sending false messages to insult, defame, intimidate, mislead or deceive people or to intentionally cause public disorder is punishable under law. It is obligatory on Daijiworld to provide the IP address and other details of senders of such comments, to the authority concerned upon request.

Hence, sending offensive comments using daijiworld will be purely at your own risk, and in no way will Daijiworld.com be held responsible.