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The cash ledger balance does not lapse and can be used to pay any future tax, interest, late fee or penalty. Refund is optional. The choice depends on cash flow and whether you expect liabilities soon.
GST
Keep the balance or claim refund
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Provisions
Sec 49, CGST Act 2017; Sec 49(6), CGST Act 2017
Analysis
If your monthly cash liability is ₹40,000 and the excess is ₹60,000, it will be used in two months, so a refund is not worth the effort. If you have ₹8,00,000 lying after a one-time double payment, a refund is better. No interest is earned on ledger balances.
Close
- Estimate the next three months of cash liability
- Compare with the excess balance
- Keep the balance if it will be used soon
- Claim refund for the large or permanent excess
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