Bhagavad Gita Verse 15, Chapter 5

naadatte kasyachitpaapam na sukritam vibhoohu |
ajnyaanenaavritam jnyaanam tena muhyanti jantavaha || 15 ||
 
Neither does the eternal essence accept anyone's sins, nor anyone's merits. Ignorance veils knowledge, that is how creatures are deluded.
 
na : not
aadatte : accept
kasyachit : anyone's
paapam : sins
na : not
sukritam : merits
vibhoohu : eternal essence
ajnyaanena : ignorance
aavritam : veiled
jnyaanam : knowledge
tena : that
muhyanti : deluded
jantavaha : creatures
 
In the sequence of shlokas describing the vision of the enlightened seeker, Shri Krishna provided the illustration of the city dweller and also asserted that the eternal essence is separate and distinct from action and its adjuncts including doership, results and enjoyership of result.
 
In this shloka, he takes us another step further in explaining the distinctness of eternal essence from action. He says that even sin and merit also have nothing to do with eternal essence. He also further says that action, result, doership, enjoyership, sin, merit - the notion that these belong to the "I", the eternal essence, is termed as ignorance. This ignorance is caused due to our strong identification with the body, mind and intellect.
 
Let us refer to the Pac-Man example from the previous post. Based on his actions in the video game, the Pac-Man character can gain points (merits) or lose points (demerits). This gaining and losing of points is again based on rules of the video game. It, too, is a fully automatic system that does not require any external intervention to work.
 
Now, in some places in the Gita, Shri Krisha asks us to offer merit and sin to God. But here it is said that eternal essence does not take sin or merit. So how do we reconcile this seeming contradiction? The key thing to understand here is that the person who thinks he is associated with action, sin and merit is at one level, and the person who has identified himself with eternal essence is at another level. It is just like saying that the points accumulated in a Pac-Man game have no bearing in the real world. The game and the real world are two different realms.
 
Another way to look at it is as follows. Sin and merit are duality. They are two sides of the same coin, as it were, just like black/white, heat/cold and day/night. When you rise above it, duality has no bearing. Day and night do not mean anything when one is in outer space, when one leaves the earth and rises above it.
 
Here's another noteworthy point. Shri Krishna has used an interesting word to refer to ignorant people in this shloka. He calls them creatures. It is a subtle hint that as long as we operate with body identification, we are similar to animals who also operate only at that level.