Setting off Inputs GST of Different Heads


As we all know that IGST Input can be utilized against IGST output, then against CGST after setting off CGST input and SGST after setting off SGST input accordingly. But the same has changed consequent to the insertion of Sections 49A and 49B vide CGST Amendment Act 2018.

Brief Explanation of Section 49A and Section 49B

These Sections have an overriding effect on the erstwhile Section 49(5) of CGST Act which speaks:-

1) Section 49A on Conditions for utilisation of GST Input Tax Credit :- IGST Credit should be fully exhausted before utilising CGST and SGST credits to set-off GST Liabilities.

2) Section 49B on Order of Setoff/Utilisation:- The following table gives detailed rules of utilisation of GST credits:

3) How is this different from treatment as per Section 49(5) :- In simple words, one cannot utilise CGST and SGST/UTGST credits unless and until -

a) IGST Credit is fully utilised.

b) If IGST Liability is still payable after setoff of IGST Credit, Utilise CGST and SGST/UTGST in that order.

c) Balance after set-off of IGST liability can be used to set off CGST and SGST/UTGST liabilities but subject to Section 49(5) clauses (e) and (f) which prohibits cross utilisation of CGST and SGST Credits.