GST set off rule in case of itc reversal

Dear Ajnas,

You can utilise CGST credit for payment of IGST if there is no ITC balance in IGST credit. After utilisation of CGST credit for CGST liability the balance can be used for IGST liability. 

Further SGST credit can be utilised for IGST liability only when the balance in CGST credit not there to utilise IGST liability. 

Legal extract for your reference. Section 49 (5);

The amount of input tax credit available in the electronic credit ledger of the registered person on account of––

(a) 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 as the case may be, Union territory tax, in that order;

(b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;

(c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;

(d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;

ITC of CGST, SGST and UTGST can be used simultaneously to setoff IGST liability provided their own liability are set off