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New rules of set off

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kapil

accountant

152 Points Posted on 15 June 2021

can igst liability be set off with sgst itc before using cgst itc?

Note:(all Igst input already utilized for igst output, here talking abt setting off remaining output of igst)

Replies (3)

Quick Summary

This discussion clarifies the rules for setting off Goods and Services Tax (GST) liabilities, specifically concerning IGST, CGST, and SGST Input Tax Credit (ITC). It explains that IGST output liability cannot be offset by SGST ITC before CGST ITC is fully utilised. According to Section 42(5)(c) of the GST Act, SGST ITC can only be used for IGST liability if there is no available CGST ITC balance.

CMA Poornima Madhava

CMA

9106 Points Posted on 15 June 2021

You may do so if there is no ITC in CGST account.

Excerpt from section 42(5)(c):

(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;

² “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;”