Skip to content

CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Procedural Compliance under GST

Under the CGST Act, 2017, a registered person's output tax liability on account of integrated tax is to be paid using input tax credit lying in the electronic credit ledger. Which rule on order of utilisation of IGST credit applies?

IGST credit must first be used to pay IGST. Any balance left can then be used for CGST and thereafter for State or Union territory tax, in that sequence, as section 49(5)(a) lays down.

  1. AIGST credit is first used for IGST, and any balance may then be used for CGST and then SGST/UTGST, in that orderCorrect
  2. BIGST credit is first used for CGST, then SGST/UTGST, and only then for IGST
  3. CIGST credit may be used only for IGST and never for CGST or SGST
  4. DIGST credit is used for SGST first and then for CGST

Explanation

Section 49(5)(a) requires IGST credit to be applied first against IGST. Any remaining balance may be used against CGST and then State/UT tax, in that order. Using it first for CGST or SGST reverses the statutory order.

Did you get it right without looking?

One question tells you little. A timed set on Procedural Compliance under GST shows your real accuracy, how long you take and where you lose marks.

Practise Procedural Compliance under GSTFree diagnostic mock

More Procedural Compliance under GST questions