Adjustment of input credit - new amend.

14 March 2019
Dear Expert,
It is heared that GST Council has done some changes regarding adjustment of IGST input credit. Kindly provide information with relevant Sections & Notifications please

CA Anita Bhadra (Expert)
15 March 2019
A new section 49 A has been inserted regarding for utilization of IGST
According to new provision , first you have to utilised .IGST against available credit of IGST/ CGST & SGST .
For Example ,
You have total credit of Rs 300/- [ IGST 100+ CGST 100+ SGST 100]
And your liability is – CGST 150 , & SGST 150 /-
First you will adjust CGST liability of Rs 100 against IGST credit available .
After that balance CGST liability of Rs 50/- will be adjusted with CGST .
Then Your SGST Liab of Rs 150/- will be adjusted against SGST Credit
Though you will have balance ITC of Rs 50 in CGST , it can not be adjust against SGST and you will have to pay Ts 50/- as SGST Liab

P.Harish (Querist)
16 March 2019
Dear madam thank for reply, Earlier also cross utilisation of Input Credit was not allowed, can u please share Notification or Circular ref plz

CA Anita Bhadra (Expert)
16 March 2019
Yes , Earlier also cross utilization was not allowed .

As pwe newly inserted sec 49A - before utilizing the balance of input tax credit of CGST, SGST or UTGST, the balance of input tax credit of IGST should be NIL i.e. the balance of input tax credit of IGST should be used first towards payment of IGST, CGST, SGST or UTGST.

notification no. 02/2019-Central Tax dated 29th January, 2019, the Central Government announced that the Central Goods and Service Tax (Amendment) Act, 2018 shall come into force from 1st February, 2019.

With the said announcement, there are various rules / provisions affecting utilization of input tax credit which has been amended. Entirely new section 49A has been introduced

P.Harish (Querist)
16 March 2019
Thanks again for valuable information

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