Refund_ Insufficient in credit ledger

This query is : Resolved

dhamu (Querist)
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30 July 2025 Shall we adjust available ITC in CGST to IGST for refund under export of sales without payment of duty.
Due to surprise visit from the department, we have filed DRC-03 subsequently the accumulated ITC has been reduced.
There is an available ITC in IGST and when IGST ITC is insufficient for the balance amount, shall we utilize CGST ITC for refund?

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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12 August 2025 Can you adjust CGST ITC against IGST for refund purpose?
No, as per GST rules, ITC is not interchangeable across different heads (CGST, SGST, IGST) for refund purposes.
For refund of unutilized ITC on exports without payment of tax:
You can only claim refund of unutilized ITC in the IGST ledger.
CGST and SGST ITC cannot be used or adjusted to increase IGST ITC balance for refund claim.
The ITC credit ledger heads are distinct, and cross-utilization is allowed only for payment of tax liability, not for refund claims.
What to do if IGST ITC is insufficient?
If IGST ITC balance is insufficient for refund, you cannot adjust CGST ITC to increase refund claim.
Refund will be limited to the available unutilized IGST ITC.
The reduction in ITC due to DRC-03 (demand and recovery) will affect available credit.

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