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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Input Tax Credit and Computation of GST Liability

Which statement about utilisation of ITC under the CGST Act, 2017 is correct?

Section 49A overrides section 49 and says central, State or Union territory tax credit may be used for paying tax only after integrated tax credit has first been fully utilised. It was inserted by Act 31 of 2018 from 1 February 2019.

  1. ASection 49A is expressed to apply notwithstanding anything in section 49, and it concerns central, State and Union territory tax credit being used only after integrated tax credit is fully utilisedCorrect
  2. BSection 49A permits central tax credit to be used before integrated tax credit
  3. CSection 49A was part of the original Act and has been effective since 1 July 2017
  4. DSection 49A restricts the use of integrated tax credit until central tax credit is exhausted

Explanation

Section 49A opens with 'Notwithstanding anything contained in section 49'. It was inserted by Act 31 of 2018 with effect from 1-2-2019, so it was not part of the original Act. It restricts the use of central, State and UT tax credit, not integrated tax credit.

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