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To claim amount in credit/cash ledger

Vivek (Student) (35 Points)

13 August 2020

Hi,

Say Mr. Abcd filed GSTR-3B for the month of July and say his sales gst was 50 and purchase gst was 100. Now 50 will go in credit ledger to be consumed next month. Now due to some unforeseen circumstances he winds up and surrenders his gst number and everything from 1st August then can he get those 50 from the credit ledger as a refund or something?

Also how to use/consume amount which is in cash ledger in the above case? Or can the same be refunded too?

Thanks

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6 Replies

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 13 August 2020

1. If Sales GST in July is 100 and purchase GST ITC is 50, than nothing will go in GST Credit ledger, as your sale liability is more than ITC on Purchase, additionally you have to Pay Rs. 50 (100-50) via challan or through cash ledgers balance, if any.
2. if due to any reason you cancelled your GSTIN, than after set off of all liability, if any balance remain in Credit Ledger, than that will lapse. Yes, but if any balance there in cash Ledger, than you can claim refund of same.

Vivek (Student) (35 Points)
Replied 13 August 2020

Originally posted by : Sagar Patel
	1. If Sales GST in July is 100 and purchase GST ITC is 50, than nothing will go in GST Credit ledger, as your sale liability is more than ITC on Purchase, additionally you have to Pay Rs. 50 (100-50) via challan or through cash ledgers balance, if any.2. if due to any reason you cancelled your GSTIN, than after set off of all liability, if any balance remain in Credit Ledger, than that will lapse. Yes, but if any balance there in cash Ledger, than you can claim refund of same.

Thanks for replying sir.

Sorry my mistake. Have corrected point 1, its purchase 100 and sales 50. So, whatever is the balance in cash and credit ledger it can be claimed and it will come back in form of a cheque in the name of the business entity? How many days does it take for the refund process?

Vivek (Student) (35 Points)
Replied 13 August 2020

Originally posted by : Sagar Patel
	1. If Sales GST in July is 100 and purchase GST ITC is 50, than nothing will go in GST Credit ledger, as your sale liability is more than ITC on Purchase, additionally you have to Pay Rs. 50 (100-50) via challan or through cash ledgers balance, if any.2. if due to any reason you cancelled your GSTIN, than after set off of all liability, if any balance remain in Credit Ledger, than that will lapse. Yes, but if any balance there in cash Ledger, than you can claim refund of same.

Thanks for replying sir. Sorry my mistake. Have corrected point 1, its purchase 100 and sales 50. So, whatever is the balance in cash and credit ledger it can be claimed and it will come back in form of a cheque in the name of the business entity? How many days does it take for the refund process?

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 13 August 2020

No you cannot claim anything from credit Ledger.

As per Rule 20 of CGST Act while filing Application for cancellation in form REG-16 , the details of Inputs held in stock (Semi or Finished) & of capital Goods need to be paid by credit or cash ledger.

Note : And if any balance is still left in credit ledger cannot be claimed as refund because the refund from credit ledger can be claimed only as per the condition prescribed in section 54 of CGST Act . So it will be get lapsed.
In books same can be accounted as expenditure.

Vivek (Student) (35 Points)
Replied 14 August 2020

Originally posted by : Pankaj Rawat
	No you cannot claim anything from credit Ledger. As per Rule 20 of CGST Act while filing Application for cancellation in form REG-16 , the details of Inputs held in stock (Semi or Finished) & of capital Goods need to be paid by credit or cash ledger. Note : And if any balance is still left in credit ledger cannot be claimed as refund because the refund from credit ledger can be claimed only as per the condition prescribed in section 54 of CGST Act . So it will be get lapsed. In books same can be accounted as expenditure.

Sir do you have any link for official rule of unused balance in credit ledger?

What about the balance in cash ledger? Can that be redeemed?

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 14 August 2020

Mr. Vivek
Refund of unused credit ledger bal. is not allowed at all.

Refund of Cash ledger balance is allowed.
You can make applicable for refund for cash Ledger balance online from GSTIN Portal.

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