ITC under CGST head can be moved or claim as refund

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This query is : Resolved

SRINATH sahu (Querist)

23 November 2019 My on client have 90000/- ITC in CGST head, all sales of client is local, but purchases is Interstate 70% & local 70% unable to use ITC under CGST head can claim refund or move the ITC into another head

JATIN DUGGAL

JATIN DUGGAL (Expert)

23 November 2019 In respect of claiming Refund of ITC, As per Proviso to Section 54(3) of CGST Act, 2017 refund of unutilised ITC is allowed only in 2 cases:-

1st one Zero Rated Supply made without payment of tax;

2nd One on account of Inverted Duty Structure i.e. tax rate on inputs is higher as compared to Tax Rate on Outward Supply (except nil rated and exempted outward supply).

Only in above mentioned cases you can claim refund of ITC.

With respect to transferring Balance in One ledger to another ledger: No such provision under GST law for transferring ITC from CGST head to SGST head.

Finance Act, 2019 has introduced provision for transferring balance in cash ledger from one head to another head but that has also not been notified till date.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

24 November 2019 Adjustable against other heads.
Rule 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.

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