Question ID : 38059

UTILIZATION OF ITC UNDER GST

My total liability under gst is CGST 24,00,000 and SGST 24,00,000. I had available itc in credit ledger IGST 33,00,000, CGST 2,72,000 and SGST 2,72,000 and in cash Ledger CGST 5,72,000 and SGCT 5,72,000. My calculation is CGST Liabi. 24,00,000-2,72,000(CGST credit)-5,72,000 (Cash ledger)-15,56,000(IGST Credit)=0 SGST Liab. 24,00,000-2,72,000(CGST credit)-5,72,000 (Cash ledger)-15,56,000(IGST Credit)=0 ITC in credit ledger is IGST =188000. Whether it is correct.

Answer ID : 76428

Yes. The calculation is correct.

Answer ID : 76429

Seems to be correct.

Answer ID : 76435

The computation provided by you is not correct. The question has to be analysed in light of the newly inserted Section 49A (w.e.f. 01.02.2019), which provides as under 49A. Notwithstanding anything contained in section 49, the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment. Further Rule 88A has been inserted w.e.f. which provides as under Input tax credit on account of 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 Union territory tax, as the case may be, in any order Provided that the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully. By virtue of the above amendments 1. IGST credit shall be fully utilised against IGST liability and then towards CGST/SGST liability, before utilising CGST and SGST Credits 2. This may possibly lead to accumulation of CGST / SGST Credits and result in cash outflow. 3. In your case, you would have to fully utilise the credit of IGST, before adjustment of CGST & SGST Credits. Kindly note that the above amendments were not implemented in the GST portal for the return filed for the month of February 2019. The same are expected to be made effective for the return to be filed for March 2019.

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