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CS Executive · Tax Laws and Practice · Input Tax Credit and Computation of GST Liability

Section 49A of the CGST Act, 2017 begins with the words 'Notwithstanding anything contained in section 49'. What does this signify?

The phrase means section 49A overrides section 49. Even if section 49 would otherwise allow utilisation, central, State or Union territory tax credit can be used only after the integrated tax credit has first been fully utilised towards the payment.

  1. AThe restriction on utilising CGST, State or UT tax credit until IGST credit is exhausted prevails over section 49Correct
  2. BSection 49 prevails over section 49A in case of conflict
  3. CSection 49A applies only when the person has no cash ledger balance
  4. DSection 49A applies only to refunds of unutilised credit

Explanation

A non-obstante clause gives the provision overriding effect. Section 49A therefore prevails over section 49, so IGST credit must be fully used first. The idea that section 49 prevails reverses the effect of the clause.

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