Payment of tax, interest, penalty and other amounts
Section 49, CGST Act
Straight from CBIC
Official source, not a summary of a summary
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Amendment history
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Section 49 sets up three ledgers: the electronic cash ledger (money you deposit), the electronic credit ledger (your ITC), and the electronic liability register. The cash ledger can pay any dues; the credit ledger can pay output tax only – never interest, penalty or late fee. ITC is set off in a fixed order (IGST credit first). You can transfer balances within the cash ledger (PMT-09).
What this means in practice
The parts that actually decide cases — the things a practitioner checks first.
Credit ledger pays OUTPUT TAX only. Interest, penalty, late fee and any reverse-charge liability must come from the cash ledger – a client who thinks his credit balance covers interest will be short.
Utilisation order (Rule 88A): IGST credit must be exhausted first, towards IGST and then in any order towards CGST and SGST; only then may CGST or SGST credit be used. CGST credit can never pay SGST and the reverse.
Rule 86B: where monthly taxable turnover exceeds Rs 50 lakh, at least one per cent of the output tax must be paid in cash, with the income-tax and refund-history exceptions.
PMT-09 transfers a cash-ledger balance between heads and between distinct persons on the same PAN – useful before writing a refund application for a wrong-head deposit.
Payment is complete only when the amount is debited on filing the return; a deposit sitting in the cash ledger does not stop interest.
Questions people actually ask
Real questions we get on this provision, answered straight.
We have a large ITC balance. Can we use it to pay the interest on a late return?+
No. The electronic credit ledger can discharge output tax only. Interest, penalty and late fee must be paid in cash, which is why a late GSTR-3B still needs a cash outflow even with credit in hand.
We deposited tax under the wrong head. Do we need a refund claim?+
Usually not – transfer it in PMT-09 between heads or to another GSTIN on the same PAN. A refund application is needed only where the money has to come out of the system.
How this provision is built
The skeleton, clause by clause — useful when a notice cites a specific sub-clause.
The exact words of the law
5,817 characters, uneditedReproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.
Read the full provision+
(1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed , shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed .
(2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with 1 [ section 41 2 [***]], to be maintained in such manner as may be prescribed .
(3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed .
(4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions 3 [and restrictions] within such time as may be prescribed.
(5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of-
(a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;
(b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;
(c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax 4 [ Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;];
(d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax: 5 [ Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;]
(e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and
(f) the State tax or Union territory tax shall not be utilised towards payment of central tax.
(6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of section 54 .
(7) All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register in such manner as may be prescribed .
(8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely:-
(a) self-assessed tax, and other dues related to returns of previous tax periods;
(b) self-assessed tax, and other dues related to the return of the current tax period;
(c) any other amount payable under this Act or the rules made thereunder including the demand determined under section 73 or section 74 8 [ or section 74A].
(9) Every person who has paid the tax on goods or services or both under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods or services or both. 7 [ 6 [
(10) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under this Act, to the electronic cash ledger for,––
(a) integrated tax, central tax, State tax, Union territory tax or cess; or
(b) integrated tax or central tax of a distinct person as specified in sub-section
(4) or, as the case may be, sub-section
(5) of section 25 , in such form and manner and subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be a refund from the electronic cash ledger under this Act: Provided that no such transfer under clause
(b) shall be allowed if the said registered person has any unpaid liability in his electronic liability register.]
(11) Where any amount has been transferred to the electronic cash ledger under this Act, the same shall be deemed to be deposited in the said ledger as provided in subsection (1).] 3 [
(12) Notwithstanding anything contained in this Act, the Government may, on the recommendations of the Council, subject to such conditions and restrictions, specify such maximum proportion of output tax liability under this Act or under the Integrated Goods and Services Tax Act, 2017 which may be discharged through the electronic credit ledger by a registered person or a class of registered persons, as may be prescribed] Explanation .-For the purposes of this section,-
(a) the date of credit to the account of the Government in the authorised bank shall be deemed to be the date of deposit in the electronic cash ledger;
(b) the expression,-
(i) "tax dues " means the tax payable under this Act and does not include interest, fee and penalty; and (ii) "other dues" means interest, penalty, fee or any other amount payable under this Act or the rules made thereunder
High Court cases on this section
Judgments in our index that cite this provision. Being listed does not make a case good law — it may have been appealed or distinguished since. Read it before relying on it.
Periyasamy Karthikeyan v. The State Tax Officer
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M/S. VK BUILDING SERVICES PRIVATE LIMITED v. THE ADDITIONAL COMMISSIONER OF GST
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SANKAR NPJAPAN (P) LTD., v. THE ASSISTANT COMMISSIONER (ST)
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M/s.Eicher Motors Limited v. Superintendent of GST and Central Excise, Range-II,
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M/S SRI GAJALAKSHMI PAINTS v. THE COMMERCIAL TAX OFFICER
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MILAP SCRAP TRADERS THROUGH PRO. HARSHADBHAI MANUBHAI PATEL v. STATE/ COMMERCIAL TAX OFFICER
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What changed, and when
The amendment trail, newest first — because the version that applies to your case depends on the period.
2022-10-01 · Omitted
18/2022 – CT
Omitted (w.e.f. 1st October, 2022 vide Notification No. 18/2022 – CT dated 28.09.2022 ) by s. 110 of The Finance Act 2022 (No. 6 of 2022).
2022-10-01 · Inserted
18/2022 – CT
Inserted (w.e.f. 1st October, 2022 vide Notification No. 18/2022 – CT dated 28.09.2022 ) by s. 110 of The Finance Act 2022 (No. 6 of 2022).
date not stated · Substituted
Substituted by s. 20 of The Central Goods and Services Tax (Amendment) Act, 2018 for "section 41". This amendment, not yet enforced.
date not stated · Inserted
Inserted by s. 20 of The Central Goods and Services Tax (Amendment) Act, 2018 – Brought into force w.e.f. 01-02-2019.
date not stated · Inserted
Inserted by s. 20 of The Central Goods and Services Tax (Amendment) Act, 2018 – Brought into force w.e.f. 01-02-2019.
date not stated · Substituted
9/2022-C.T
Substituted by s. 110 of The Finance Act 2022 (No. 6 of 2022) – Brought into force w.e.f. 05-07-2022 vide Notification No. 9/2022-C.T , dated 05-07-2022.
date not stated · Inserted
1/2020-C.T.
Inserted by s. 99 of the Finance (No. 2) Act, 2019 – Brought into force w.e.f. 01-01-2020 vide Notification No. 1/2020-C.T. , dated 01-01-2020.
date not stated · Inserted
Inserted by section 125 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.
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Where this comes from
Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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