Introduction: This article discusses in detail about adjustment order of Input tax credit under GST.

Query:  As per rule first IGST has to be adjusted in CGST and then SGST, but because of lack of knowledge, IGST has been adjusted 50-50 against tax liabilities as per below screen shot and submitted GSTR 3B, and deposited challan of balance amount. Now the form GSTR 3B has been Submitted/freezed. But the system is not allowing this adjustment and asking for tax to be deposited. Now What step we should do for next.? Please advise.

Ans.  The order for utilization of tax credit has been provided under section 49(5) of the CGST Act.

If ITC is received on account of IGST

  • It should be used to pay IGST first.
  • Then, any remaining amount should be used to pay CGST.
  • The last priority should be given to payment of SGST.

If ITC is received on account of SGST

  • It should be used to pay SGST first.
  • Then, any remaining amount should be used to pay IGST.
  • Note that you cannot use ITC of SGST to pay CGST. 

If ITC is received on account of IGST

  • It should be used to pay IGST first.
  • Then, any remaining amount should be used to pay CGST.
  • The last priority should be given to payment of SGST.

Accordingly, ITC set off is done in the following manner

  • IGST - IGST, CGST, SGST (in that order)
  • CGST - CGST and IGST
  • SGST - SGST and IGST

(Adjustment / Setoff shall be done 100% against the outstanding tax liability, No 50%-50% setoff is allowed).

The author is a practicing CA based in Delhi and is registered Insolvency Professional. He can also be reached at cavinodchaurasia@gmail.com

Disclaimer: The views expressed in this article are strictly personal. The content of this document are solely for informational purpose. It doesn’t constitute professional advice or recommendation. The Author does not accept any liabilities for any loss or damage of any kind arising out of information in this article and for any actions taken in reliance thereon.


5447 Views 1 Likes Comment   Share GST   Report


About the Author

Partner

CA. Vinod chaurasia is a practising CA from New Delhiand is registered Insolvency Professional. His areas of interest are GST, RERA, Insolvency and Bankruptcy Code, He can be reached at cavinodchaurasia @ gmail.com , Mob. +91 9953587496.


CCI Pro

Comments


Related Articles


Loading


Popular Articles





CCI Pro
Meet our CAclubindia PRO Members

CCI Articles

submit article


Company
09 June 2026
Accounts Associate

S Madan and CO

New Delhi

Graduate (Any)

View Details
Company
29 May 2026
Finance Head

Bhawar Sales Corporation

Chennai

Graduate (Any)

View Details
Company
19 June 2026
Accounts Executive

Getfive Advisors Pvt. Ltd.

Ahmedabad

CA Inter

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
10 June 2026
Senior Account Executive

JDS Advisory LLP

Ahmedabad

CA Inter

View Details
Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details
Company
24 June 2026
Chartered Accountant - GST & Direct Tax

APL

Mumbai

CA

View Details
Company
26 May 2026
CA / MBA (Finance) / CMA / M.Com (Finance)

Sri Aurobindo Gnostic Centre of Education

New Delhi

CA

View Details