New setoff rule to be applied - please guide

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This discussion clarifies the application of new Goods and Services Tax (GST) set-off rules. It demonstrates how to use available Input Tax Credits (ITC) for IGST, CGST, and SGST to offset your tax liabilities. The example confirms that IGST credit can be used first, followed by CGST and SGST, to minimise cash payments.

Pragna Marfatia

Pragna Marfatia (Querist)
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15 May 2021 I have credit of (current ITC and Ledger + cash credit) as given below:

IGST - 4500
CGST - 900
SGST - 5800

I have to pay tax liability, say as given below:
IGST - 10000
CGST - 1500
SGST - 1500

So as per new set off rule,
IGST liability of 10000, to be set off using ITC of 4500 of IGST+900 of CGST+4600 of SGST

Then my credit will be only for SGST - Rs. 1200

So I need to pay tax as CGST - Rs. 1500, SGST as Rs. 300 (1500-1200).

I will be greatful if you can guide as to this understanding is correct.

Regards,