The Three Electronic Ledgers and What Each Can Pay

Three Electronic Ledgers explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Every rupee of GST passes through one of three registers on the portal. They look similar and behave very differently.

Electronic cash ledger — FORM GST PMT-05, under s.49(1) and Rule 87: money deposited, usable for any liability. Electronic credit ledger — FORM GST PMT-02, under s.49(2) and Rule 86: input tax credit, usable for output tax only. Electronic liability register — FORM GST PMT-01, under Rule 85: what is owed, debited as liabilities arise and credited as they are discharged.

The electronic cash ledger

In: deposits made through internet banking, credit or debit card, NEFT, RTGS or over the counter, using a challan in FORM GST PMT-06, which is valid for fifteen days. Also TDS credited under s.51 and TCS under s.52, and refunds re-credited where a claim is rejected.

Out: any amount payable — tax, interest, penalty, fee or any other amount.

Key features:

• Rule 87(3) — over-the-counter payment is restricted to ₹10,000 per challan per tax period, with exceptions for Government deposits, proper officer recoveries and specified cases.
• Rule 87(4) — for NEFT or RTGS, a mandate form is generated with the challan, valid for fifteen days.
• Section 49(6) — the balance in the cash ledger, after payment of tax, interest, penalty, fee or any other amount, may be refunded under s.54.
• Section 49(10) — amounts may be transferred between heads using FORM GST PMT-09.

The electronic credit ledger

In: input tax credit as self-assessed in the return, under s.41(1), credited on a provisional basis and subject to the conditions and restrictions prescribed.

Out: output tax only — s.49(4).

Key features:

• Section 2(82) excludes reverse charge tax from output tax, so RCM is cash-only.
• Interest, penalty, late fee and other amounts cannot be paid from it.
• Section 49A and Rule 88A govern the order of utilisation. Order of utilisation →
• Rule 86A allows an officer to block debit of an amount for up to one year. Rule 86A →
• Rule 86B caps utilisation at 99% of output tax where monthly taxable supply exceeds ₹50 lakh. Rule 86B →
• Section 49(6) — the balance may be refunded, but only in the two categories s.54(3) allows: zero-rated supplies and inverted duty structure.
• No transfer between heads. PMT-09 operates on the cash ledger only.

The electronic liability register

Rule 85(1): the electronic liability register specified under s.49(7) shall be maintained in FORM GST PMT-01 for each person liable to pay tax, interest, penalty, late fee or any other amount.

Rule 85(2): the register is debited by the amount payable per the return; the amount payable per an assessment, enforcement, rectification or appeal order; the amount of tax and interest payable as a result of mismatch; and any amount of interest that may accrue.

Rule 85(3): payment is made by debiting the credit ledger or the cash ledger, and the liability register is credited accordingly.

Rule 85(4): the amount deducted under s.51, collected under s.52, payable on reverse charge, payable under s.10, and payable towards interest, penalty, fee or any other amount shall be paid by debiting the electronic cash ledger and the liability register credited.

That sub-rule is the operative statement of the cash-only categories, and it is worth reading as the definitive list.

Section 49(8): the order of discharge

Where a person has liabilities for several tax periods, payments are appropriated in the following order:

(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, including any demand determined under s.73, s.74 or s.74A.

So a payment cannot be earmarked to a current period while previous periods remain open. The system appropriates oldest first.

Sections 49(9) to (12)

s.49(9) — every person who has paid tax on goods or services or both under the Act shall, unless the contrary is proved, be deemed to have passed on the full incidence of such tax to the recipient. This is the presumption behind the unjust enrichment test in refund claims.

s.49(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 to the cash ledger for integrated tax, central tax, State tax, Union territory tax or cess, in the prescribed form and manner. PMT-09: transfer between heads →

s.49(11) — where any amount has been transferred to the electronic cash ledger under the Act, the same shall be deemed to be deposited in the said ledger as provided in s.49(1).

s.49(12) — the Government may, on the Council's recommendation, subject to such conditions and restrictions, specify such maximum proportion of output tax liability which may be discharged through the electronic credit ledger by a registered person or a class of registered persons — the enabling provision for Rule 86B.

Key takeaways

• Cash ledger (PMT-05) — pays anything; funded by PMT-06 challan, valid fifteen days.
• Credit ledger (PMT-02) — pays output tax only; no interest, penalty, late fee or RCM.
• Liability register (PMT-01) — records what is owed and is credited as it is discharged.
• Rule 85(4) lists the cash-only categories definitively.
• s.49(8) appropriates payments oldest period first.
• PMT-09 transfers within the cash ledger only; the credit ledger has no equivalent.

Read next

• Electronic Cash Ledger, Credit Ledger and Liability Register
• Order of Utilisation: Sections 49A, 49B and Rule 88A
• PMT-09: Transfer Between Heads and Its Limits
• Rule 86B: The 1% Cash Payment Rule

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act and Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition).