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CMA Final · Indirect Tax Laws and Practice · Walkthrough of GSTN Portal

Sharma Foods Ltd has an output tax liability for the month of Rs 90,000 CGST, Rs 90,000 SGST and Rs 40,000 IGST. Its electronic credit ledger shows IGST Rs 150,000, CGST Rs 30,000 and SGST Rs 20,000. Applying the utilisation order, what is the minimum cash payment required for the month (ignore any other restrictions)?

The total liability is Rs 220,000 and total available credit is Rs 200,000, and since IGST credit can be applied across all heads after IGST liability, the balance payable in cash is Rs 20,000. Hence Rs 30,000 is wrong.

  1. ARs 30,000Correct
  2. BRs 40,000
  3. CRs 20,000
  4. DRs 70,000

Explanation

IGST credit is first used for IGST liability: 150,000 - 40,000 = 110,000 left. Remaining IGST then goes to CGST and SGST in any order, but fully used. CGST liability 90,000: use CGST credit 30,000 first, then IGST 60,000. SGST 90,000: use SGST credit 20,000, then IGST 70,000 would be needed, but only 50,000 IGST remains after CGST; so first allocate: IGST remaining 110,000 covers CGST balance 60,000 and SGST balance 70,000 totalling 130,000. Shortfall is 20,000... Re-check: total credit 200,000 against liability 220,000, giving cash of 20,000.

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