Section 53A - Transfer of certain amounts

Practical example

A permitted transfer of central-tax cash balance to another distinct person’s State-tax head triggers prescribed government settlement.

Professional alert

The transfer facility is subject to portal and unpaid-liability conditions.

CGST Rules - rule by rule The rule text layer is paired with a current amendment/control note. Forms and portal labels may change; use the latest official utility. Rule 85 RULE TEXT / CONSOLIDATED BASE LAYER 85. Electronic Liability Register.-(1) The electronic liability register specified under sub- section (7) of section 49 shall be maintained in FORM GST PMT-01 for each person liable to pay tax, interest, penalty, late fee or any other amounton the common portal and all amounts payable by him shall be debited to the saidregister.

(2) The electronic liability register of the person shall be debited by- 170 Inserted vide Notf no. 60/2018 - CT dt. 30.10.2018 171 Inserted vide Notf no. 33/2019-CT dt. 18.07.2019 with effect from a date to be notified later. (a) the amount payable towards tax, interest, late fee or any other amount payable as per the return furnishedby the said person; (b) the amount of tax, interest, penalty or any other amount payable as determined by a proper officer in pursuance of any proceedings under the Act or as ascertained by the said person; (c) the amount of tax and interest payable as a result of mismatch under section 42 or section 43 or section 50; or (d) any amount of interest that may accrue from time to time. (3) Subject to the provisions of section 49, section 49A and section 49B 172, payment of every liability by a registered person as per his return shall be made by debiting the electronic credit ledger maintained as per rule 86 or the electronic cash ledger maintained as per rule 87 and the electronic liability register shall be credited accordingly. (4) The amount deducted under section 51, or the amount collected under section 52, or the amount payable on reverse charge basis, or the amount payable under section 10, any amount payable towards interest, penalty, feeor any other amount under the Act shall be paid by debiting the electronic cash ledger maintained as per rule 87 and the electronic liability register shall be credited accordingly. (5) Any amount of demand debited in the electronic liability register shall stand reduced to the extent of relief given by the appellate authority or Appellate Tribunal or court and the electronic tax liability register shall be credited accordingly. (6) The amount of penalty imposed or liable to be imposed shall stand reduced partly or fully, as the case may be, if the taxable person makes the payment of tax, interest and penalty specified in the show cause notice or demand order and the electronic liability register shall be credited accordingly. (7) A registered person shall, upon noticing any discrepancy in his electronic liability ledger, communicate the same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Electronic liability register in PMT-01 records return, demand and other liabilities; current forms include negative-liability adjustments where prescribed. Rule 86 RULE TEXT / CONSOLIDATED BASE LAYER

86. Electronic Credit Ledger.-(1) The electronic credit ledger shall be maintained in FORM GST PMT-02 for each registered person eligible for input tax credit under the Acton the common portal and every claim of input tax credit under the Act shall be credited to the said ledger. (2) The electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the provisions of section 49 or section 49A or section 49B173. 172 Inserted vide Notf no. 03/2019-CT dt. 29.01.2019 wef 01.02.2019 173 Inserted vide Notf no. 03/2019-CT dt. 29.01.2019 wef 01.02.2019 (3) Where a registered person has claimed refund of any unutilized amount from the electronic credit ledger in accordance with the provisions of section 54, the amount to the extent of the claim shall be debited in the said ledger. (4) If the refund so filed is rejected, either fully or partly, the amount debited under sub- rule (3), to the extent of rejection, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03. (4A) Where a registered person has claimed refund of any amount paid as tax wrongly paid or paid in excess for which debit has been made from the electronic credit ledger, the said amount, if found admissible, shall be re- credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03.174 (5) Save as provided in the provisions of this Chapter, no entry shall be made directly in the electronic credit ledger under any circumstance. (6) A registered person shall, upon noticing any discrepancy in his electronic credit ledger, communicate the same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04. Explanation.- For the purposes of this rule, it is hereby clarified that a refund shall be deemed to be rejected, if the appeal is finally rejected or if the claimant gives an undertaking to the proper officer that he shall not file an appeal. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Electronic credit ledger PMT-02 records eligible ITC and permitted debits. Notification 20/2024 removed the former rule 96(10)-linked recredit restriction reference. Rule 86A RULE TEXT / CONSOLIDATED BASE LAYER 86A. Conditions of use of amount available in electronic credit ledger.- (1) The Commissioner or an officer authorised by him in this behalf, not below the rank of an Assistant Commissioner, having reasons to believe that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible in as much as- a) the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36- i. issued by a registered person who has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or ii. without receipt of goods or services or both; or b) the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36 in respect of any supply, the tax charged in respect of which has not been paid to the Government; or 174 Inserted vide Notf no. 16/2020-CT dt. 23.03.2020 c) the registered person availing the credit of input tax has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or d) the registered person availing any credit of input tax is not in possession of a tax invoice or debit note or any other document prescribed under rule 36, may, for reasons to be recorded in writing, not allow debit of an amount equivalent to such credit in electronic credit ledger for discharge of any liability under section 49 or for claim of any refund of any unutilised amount. (2) The Commissioner, or the officer authorised by him under sub-

rule (1) may, upon being satisfied that conditions for disallowing debit of electronic credit ledger as above, no longer exist, allow such debit. (3) Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction.”175. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Commissioner/authorised officer may block suspected fraudulent/ineligible credit on recorded reasons for up to one year; use must be proportionate and evidence-based. Rule 86B RULE TEXT / CONSOLIDATED BASE LAYER 86B. Restrictions on use of amount available in electronic credit ledger.-Notwithstanding anything contained in these rules, the registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of ninety-nine per cent. of such tax liability, in cases where the value of taxable supply other than exempt supply and zero-rated supply, in a month exceeds fifty lakh rupees: Provided that the said restriction shall not apply where - (a) the said person or the proprietor or karta or the managing director or any of its two partners, whole-time Directors, Members of Managing Committee of Associations or Board of Trustees, as the case may be, have paid more than one lakh rupees as income tax under the Income-tax Act, 1961(43 of 1961) in each of the last two financial years for which the time limit to file return of income under subsection (1) of section 139 of the said Act has expired; or (b) the registered person has received a refund amount of more than one lakh rupees in the preceding financial year on account of unutilised input tax credit under clause (i) of first proviso of sub-section (3) of section 54; or (c) the registered person has received a refund amount of more than one lakh rupees in the preceding financial year on account of unutilised input tax credit under clause (ii) of first proviso of sub-section (3) of section 54; or (d) the registered person has discharged his liability towards output tax through the electronic cash ledger for an amount which is in excess of 1% of the total output tax liability, applied cumulatively, upto the said month in the current financial year; or (e) the registered person is - (i) Government Department; or

(ii) a Public Sector Undertaking; or (iii)a local authority;or (iv) a statutory body: Provided further that the Commissioner or an officer authorised by him in this behalf may remove the said restriction after such verifications and such safeguards as he may deem fit.176 175 Inserted vide Notf no. 75/2019 - CT dt26.12.2019 176 Inserted vide Notf no.94/2020 - CT dt. 22.12.2020 w.e.f 01.01.2021 CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Specified taxpayers generally cannot use ITC beyond 99% of output tax liability, subject to income-tax, refund, cash-payment and Government/PSU/statutory-body exceptions. From 1 February 2026 the notified RSP valuation category under rule 31D has a targeted exception.

Rule 87 RULE TEXT / CONSOLIDATED BASE LAYER 87. Electronic Cash Ledger.-(1) The electronic cash ledger under sub-section (1) of section 49 shall be maintained in FORM GST PMT-05 for each person, liable to pay tax, interest, penalty, late fee or any other amount, on the common portal for crediting the amount deposited and debiting the payment therefrom towards tax, interest, penalty, fee or any other amount. (2)Any person, or a person on his behalf, shall generate a challan in FORM GST PMT-06 on the common portal and enter the details of the amount to be deposited by him towards tax, interest, penalty, fees or any other amount: Provided that the challan in FORM GST PMT-06 generated at the common portal shall be valid for a period of fifteen days. Provided further that a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) may also do so through the Board‘s payment system namely, Electronic Accounting System in Excise and Service Tax from the date to be notified by the Board.177178 (3) The deposit under sub-rule (2) shall be made through any of the following modes, namely:- (i) Internet Banking through authorised banks; (ii) Credit card or Debit card through the authorised bank; (iii) National Electronic Fund Transfer or Real Time Gross Settlement from any bank; or (iv) Over the Counter payment through authorised banks for deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft:

Provided that the restriction for deposit up to ten thousand rupees per challan in case of an Over the Counter payment shall not apply to deposit to be made by - (a) Government Departments or any other deposit to be made by persons as may be notified by the Commissioner in this behalf; (b) Proper officer or any other officer authorised to recover outstanding dues from any person, whether registered or not, including recovery made through attachment or sale of movable or immovable properties; (c) Proper officer or any other officer authorised for the amounts collected by way of cash, cheque ordemand draft during any investigation or enforcement activity or any ad hoc deposit: Provided further that a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) may also make the deposit under sub-rule (2) through international money transfer through 177 Inserted vide Notf no. 22/2017 - CT dt 17.08.2017 178 Omitted vide Notf no. 31/2019 - CT dt. 28.06.2019 Society for Worldwide Interbank Financial Telecommunication payment network, from the date to be notified by the Board.179

Explanation.- For the purposes of this sub-rule, it is hereby clarified that for making payment of any amount indicated in the challan, the commission, if any, payable in respect of such payment shall be borne by the person making such payment. (4) Any payment required to be made by a person who is not registered under the Act, shall be made on the basis of a temporary identification number generated through the common portal. (5) Where the payment is made by way of National Electronic Fund Transfer or Real Time Gross Settlementmode from any bank, the mandate form shall be generated along with the challan on the common portaland the same shall be submitted to the bank from where the payment is to be made: Provided that the mandate form shall be valid for a period of fifteen days from the date of generation of challan. (6) On successful credit of the amount to the concerned government account maintained in the authorised bank, a Challan Identification Number shall be generated by the collecting bank and the same shall be indicated in the challan. (7) On receipt of theChallan Identification Number from the collecting bank, the said amount shall be credited to the electronic cash ledger of the person on whose behalf the deposit has been made and the common portal shall make available a receipt to this effect. (8) Where the bank account of the person concerned, or the person making the deposit on his behalf, is debited but no Challan Identification Number is generated or generated but not communicated to the common portal, the said person may represent electronically in FORM GST PMT-07 through the common portal to the bank or electronic gateway through which the deposit was initiated. (9) Any amount deducted under section 51 or collected under section 52 and claimed in FORM GSTR-02180by the registered taxable person from whom the said amount was deducted or, as the case may be, collected shall be credited to his electronic cash ledgerin accordance with the

provisions of rule 87181. (10) Where a person has claimed refund of any amount from the electronic cash ledger, the said amount shall be debited to the electronic cash ledger. 179 Inserted vide Notf no. 22/2017 - CT dt 17.08.2017 180 Omitted vide Notf no. 31/2019 - CT dt. 28.06.2019 181 Omitted vide Notf no. 31/2019 - CT dt. 28.06.2019 (11) If the refund so claimed is rejected, either fully or partly, the amount debited under sub-rule (10), to the extent of rejection, shall be credited to the electronic cash ledger by the proper officer by an order made in FORM GST PMT-03. (12) A registered person shall, upon noticing any discrepancy in his electronic cash ledger, communicate the same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04. Explanation 1.-The refund shall be deemed to be rejected if the appeal is finally rejected. Explanation2.- For the purposes of this rule, it is hereby clarified that a refund shall be deemed to be rejected, if the appeal is finally rejected or if the claimant gives an undertaking to the proper officer that he shall not file an appeal. (13) 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 the Act to the electronic cash ledger for integrated tax, central tax, State tax or Union territory tax or cess in FORM GST PMT-09.182 CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Electronic cash ledger PMT-05, challan validity, payment modes, over-the-counter limits and PMT-09 transfers apply; portal/payment date evidence should be retained. Rule 88 RULE TEXT / CONSOLIDATED BASE LAYER 88. Identification number for each transaction.-(1) A unique identification number shall be generated at the common portal for each debit or credit to the electronic cash or credit ledger, as the case may be. (2) The unique identification number relating to discharge of any liability shall be indicated in the corresponding entry in the electronic liability register. (3) A unique identification number shall be generated at the common portal for each credit in the electronic liability register for reasons other than those covered under sub-rule (2). CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Electronic liability discharge follows statutory order; credit/cash posting must match the liability register. Rule 88A RULE TEXT / CONSOLIDATED BASE LAYER 88A. Order of utilization of input tax credit.- Input tax credit on account of 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 Union territory tax, as the case may be, in any order: Provided that the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit

available on account of integrated tax has first been utilised fully.183 182 Inserted vide Notf no. 31/2019 - CT dt.28.06.2019 with effect from 21.04.2020 as notified by Notification No. 37/2020 dated 28.06.2020. 183 Inserted vide Notf No. 16/2019-CT dt. 29.03.2019 CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 After full discharge of IGST liability, remaining IGST credit may be used toward CGST and SGST/UTGST in any order and proportion before CGST/SGST credit. Rule 88B RULE TEXT / CONSOLIDATED BASE LAYER 88B. Manner of calculating interest on delayed payment of tax.- The rule prescribes interest on the portion of tax paid through the electronic cash ledger for delayed section 39 returns, subject to the statutory exceptions for proceedings, and separately determines interest where input tax credit has been wrongly availed and utilised. Wrongly availed credit is treated as utilised when the electronic credit ledger balance falls below the wrongly availed amount; the rule also fixes the date and extent of utilisation. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Current interest computation separates delayed-return cash liability from wrongly availed-and-utilised ITC and includes section 74A references from 1 November 2024. Rule 88C RULE TEXT / CONSOLIDATED BASE LAYER 88C. Manner of dealing with difference in liability reported in statement of outward supplies and that reported in return.- Where tax payable as per FORM GSTR-1, as amended in FORM GSTR-1A if any, or IFF exceeds tax payable in FORM GSTR-3B beyond the prescribed system threshold, the taxpayer is intimated in Part A of FORM GST DRC-01B and must pay or explain in Part B within the prescribed period. Non-compliance can restrict subsequent FORM GSTR-1/IFF filing and may lead to demand action. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 DRC-01B compares GSTR-1/GSTR-1A/IFF liability with GSTR-3B; payment or reasoned response is required to avoid filing restriction/escalation.

Rule 88D RULE TEXT / CONSOLIDATED BASE LAYER 88D. Manner of dealing with difference in input tax credit available in auto-generated statement and that availed in return.- Where ITC availed in FORM GSTR-3B exceeds ITC available in FORM GSTR-2B beyond prescribed system parameters, the taxpayer is intimated in Part A of FORM GST DRC-01C and must pay/ reverse with interest or explain in Part B. Non-compliance can restrict subsequent FORM GSTR-1/IFF filing and may lead to proceedings under section 73, section 74 or section 74A, as applicable. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 DRC-01C compares GSTR-3B ITC with GSTR-2B beyond system parameters; pay/reverse with interest or provide evidence-based explanation.

Notifications, circulars and implementation controls Instrument Date/status Why it matters Notification 14/2022- Central Tax 5 July 2022; deemed effective 1 July 2017 for rule 88B Introduces detailed interest computation rule. Notification 26/2022- Central Tax 26 December 2022 Introduces rule 88C and DRC-01B mismatch control. Notification 38/2023- Central Tax 4 August 2023; effective 1 October 2023 Introduces rule 88D and DRC-01C ITC mismatch control. Circular 192/04/2023- 17 July 2023 Clarifies interest for wrong IGST credit and utilisation across heads. Notification 15/2024- Central Tax 10 July 2024 Reduces notified TCS rate under section 52 to 0.5% in aggregate from the effective date. Notification 20/2025- Central Tax 31 December 2025; effective 1 February 2026 Adds targeted rule 86B exception connected with rule 31D notified goods. Reading rule: A circular guides administration but cannot override the Act, Rules or Gazette. Always read the principal instrument with amendments and effective-date clauses.

CA / finance / professional case studies Case 1: ITC utilisation Facts: Taxpayer has IGST credit 8 lakh, CGST liability 5 lakh and SGST liability 5 lakh. Question: Order? Analysis: First discharge IGST liability if any; remaining IGST credit may be allocated to CGST/SGST in any order under rule 88A before using other credits. References: Sections 49A/49B; rule 88A Case 2: Interest cash basis Facts: Late GSTR-3B has 10 lakh liability, 8 lakh discharged by eligible ITC and 2 lakh cash. Question: Interest base? Analysis: Ordinarily cash-paid 2 lakh for delayed return, subject to proceedings exception and rule 88B. References: Section 50(1); rule 88B Case 3: Wrong ITC unused Facts: Ineligible credit 3 lakh is availed but ledger never falls below 3 lakh before reversal. Question: Interest? Analysis: Rule 88B utilisation test may mean no section 50(3) interest; verify full ledger chronology. References: Section 50(3); rule 88B Case 4: Rule 86B Facts: Monthly taxable supplies exceed 50 lakh and no exception applies. Question: Cash requirement? Analysis: At least 1% of output tax liability must generally be paid in cash for the month. References: Rule 86B

Case 5: Credit block Facts: Officer blocks ITC without giving reason and retains block beyond one year. Question: Valid? Analysis: Rule 86A requires reasons to believe/record and ceases after one year; challenge facts, authority and duration. References: Rule 86A Case 6: TDS threshold Facts: One contract is 2.4 lakh plus 43,200 GST. Question: Deduct? Analysis: No solely on this amount: threshold tests taxable contract value excluding GST. References: Section 51 Case 7: TCS rate Facts: Marketplace collects consideration for taxable supplies after 10 July 2024. Question: Rate? Analysis: Apply notified aggregate TCS rate of 0.5%, split under Central/State or integrated law as applicable. References: Section 52; Notification 15/2024 Case 8: DRC-01B Facts: GSTR-1A liability exceeds GSTR-3B beyond threshold. Question: Response? Analysis: Pay through DRC-03 or explain in DRC-01B Part B within rule period to avoid filing restriction/ escalation. References: Rule 88C

Case 9: DRC-01C Facts: GSTR-3B ITC exceeds GSTR-2B because of valid import credit timing. Question: Response? Analysis: Provide documentary explanation in Part B; pay/reverse only unexplained excess with applicable interest. References: Rule 88D

Finin2min Q&A 1. What can electronic credit ledger pay? Eligible output tax only, in statutory order; not interest, penalty, late fee or RCM tax. 2. What is IGST-first rule? IGST credit must be fully used as required before CGST/SGST credit. 3. Can cash be transferred between GSTINs? Permitted cash-ledger transfer to a distinct person is available subject to section 49(10), rules and unpaid-liability conditions. 4. When does rule 86B apply? Generally where monthly taxable supplies exceed 50 lakh, subject to exclusions and exceptions. 5. How long can rule 86A block last? It ceases after one year from restriction, unless released earlier. 6. Is interest charged on all late-return tax? Generally on cash-paid portion, with statutory proceedings exception. 7. When is wrong ITC interest due? When wrongly availed and utilised, calculated under rule 88B. 8. What is DRC-01B? System intimation for GSTR-1/GSTR-1A/IFF liability exceeding GSTR-3B. 9. What is DRC-01C? System intimation for GSTR-3B ITC exceeding GSTR-2B beyond parameters. 10. What is GST TDS threshold? Contract value exceeding 2.5 lakh excluding GST, subject to place-of-supply exception. 11. What is current ECO TCS rate? Notified aggregate rate is 0.5% from 10 July 2024, split according to tax type. 12. Does TDS credit enter credit ledger? No, it enters electronic cash ledger of deductee.

Official source register Source Control purpose India Code - Central Goods and Services Tax Act, 2017, consolidated as on 11 June 2026 https://www.indiacode.nic.in/handle/123456789/15689 Primary section text and amendment footnotes. CBIC Tax Information Portal - Active CGST Rules https://taxinformation.cbic.gov.in/ Current rule text, amendment history and forms. GST Council - Central Tax Notifications https://gstcouncil.gov.in/cgst-tax-notification Gazette notification register and effective dates. GST Council - Circulars https://gstcouncil.gov.in/circulars Administrative clarifications and implementation guidance. GST Common Portal https://www.gst.gov.in/ Forms, filing utilities, advisories and due-date implementation. Professional use: Preserve the source PDF/HTML, Gazette date, portal ARN, working papers and management approval supporting every material GST position. © 2026 Finin2min. All rights reserved. Educational and professional reference only; not a substitute for transaction-specific legal or tax advice. Verify latest Gazette, applicable State law and judicial developments before reliance. Authors: CA Nikhil Gupta and Kajri Singh.

F2 Finin2min GST BARE ACT & RULES SERIES · CHAPTER XI Refunds Refund eligibility, limitation, formulas, documentation, provisional sanction, export refund, unjust enrichment and delayed-refund interest. Legal cut-off 29 June 2026 Act as on 11 June 2026 GST26

Chapter control panel Statutory coverage Sections 54, 55, 56, 57, 58 Rule coverage Rules 89, 90, 91, 92, 93, 94, 95, 95A, 96, 96A, 96B, 96C, 97, 97A Legal source hierarchy Act → Rules → Gazette notifications → binding judicial law → circulars/advisories. State overlay Use corresponding SGST/UTGST law, State notifications and local jurisdiction controls. Editorial control: The complete official section text is reproduced from the India Code consolidation. Rule cards use the official consolidated base text plus a separately identified current operative control for amendments after the base compilation. The current Gazette/active-rule page prevails.

Senior finance & tax decision flow 1 Identify refund category and claimant ↓ 2 Fix relevant date and limitation ↓ 3 Test zero-rated/inverted/statutory restrictions ↓ 4 Compile RFD-01 statements and unjust-enrichment evidence ↓ 5 Debit credit ledger where required ↓ 6 Track deficiency/acknowledgement and provisional refund ↓ 7 Respond to withholding/adjustment and final order ↓ 8 Recredit rejected amount or claim delayed-refund interest

Bare Act - paragraph by paragraph Read the statutory text first, then the practical interpretation, example and risk control.