Answer

1. F

   Facts

   No. ITC in the electronic credit ledger can pay only output tax. Interest, late fee and penalty must be paid from the electronic cash ledger. Reverse charge tax must also be paid in cash.

2. P

   Provisions and law

   • Sec 49(4), CGST Act 2017Electronic credit ledger can be used only to pay output tax, not interest, penalty, fee or reverse charge tax
   • Sec 49(1), CGST Act 2017Every deposit of tax, interest, penalty, fee or other amount is credited to the electronic cash ledger
3. A

   Analysis

   Example: GSTR-3B shows Rs 1 lakh tax, Rs 3,000 interest and Rs 1,000 late fee. Your credit ledger has Rs 1.5 lakh. You can pay the Rs 1 lakh tax from credit, but the Rs 4,000 must be deposited through PMT-06. Plan cash for late fee before filing late returns.

4. C

   Conclusion

   1. 1Check interest, late fee and RCM amounts in the return
   2. 2Deposit that amount through PMT-06 in cash
   3. 3Use credit only for forward charge output tax
   4. 4Offset and file the return

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.