So as you would be aware that while adjusting the input tax credit a lot of assessees face a problem that a large amount of CGST credit remains un-utilised and accumulated which gets carried over again and again month by month.

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To understand the problem I would first let you understand what is the order of utilisation as on current date after the insertion of rule 88A with effect from 1st of April 2019.

SequenceInput tax creditTo be set off against  
  IGST liabilityCGST liabilityS/UTGST liability
1IGST1st2nd2nd
2CGST2nd1stNot permitted
2S/UTGST2ndNot permitted1st

Now try and understand the earlier then rule 88A the order of implementation was as under, where in which 1st IGST credit has to be utilised against IGST and then mandatorily against CGST liability then system would knock it off against the SGST or UT GST liability. Same is as depicted In The table below.

SequenceInput tax creditTo be set off against  
  IGST liabilityCGST liabilityS/UTGST liability
1IGST1st2nd3rd
2CGST2nd1stNot permitted
2S/UTGST2ndNot permitted1st

The whole problem is because of the fact that the GSTN portal on Default mode still suggests knockoff of IGST as per Law earlier then 88A w.e.f 1.4.2019 effective. Hence you can do a manual edit by your own self in the IGST Adjustment as per 88A itself.

So from here onwards whenever you fill the return for the next time you can ensure that you utilise the IGST balance first adjusting with the IGST liability then with SGST so that the CGST amount and by this you can actually avoid cgst accumulation to a large extent

Hope it helps you

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