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Sir Can we keep balance in IGST instead of CGST? Or Should we completely use IGST first? Which is more preferable

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Priyanka Udeshi

Priyanka Udeshi

CA Inter

6K+

22-Mar-21 20:35

38

Answers (6)

Best Answer

Sec 49(5) (a) states " integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;".... so it is mandatory to utilise the entire IGST available in electronic credit ledger to pay IGST and then use it for CGST & SGST..... And the clauses of sub-section (5) state first use CGST for CGST and then IGST, and also first use SGST for SGST and IGST ...... and also that CGST cannot be used for SGST and SGST cannot be used for CGST payment......

In your solution, u first used IGST for IGST and there is not more IGST payable..... so the amount left under IGST can be used for CGST or SGST....... Since CGST and CGST cannot be used to settle each other, and since there is no more IGST to pay... it is ideal to pay CGST & SGST using their own balances and then the shortfall can be used from IGST balance......


sudha reddy

sudha reddy

Moderator

25-Mar-21 12:28

It is mandatory to utilise the entire IGST available in electronic credit ledger before utilising ITC on CGST or SGST. The order of setting off ITC of IGST can be done in any proportion and any order towards setting off the CGST or SGST output after utilising the same for IGST output.


sudha reddy

sudha reddy

Moderator

23-Mar-21 10:49

So Maam is my solution correct?

Yes


sudha reddy

sudha reddy

Moderator

24-Mar-21 10:50

Yes

But ma'am you said entire IGST should be utilised first And I have kept balance in IGST So how will it be correct Please clarify


Priyanka Udeshi

Priyanka Udeshi

CA Inter

6K+

24-Mar-21 20:43

But ma'am you said entire IGST should be utilised first And I have kept balance in IGST So how will it be correct Please clarify

Sec 49(5) (a) states " integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;".... so it is mandatory to utilise the entire IGST available in electronic credit ledger to pay IGST and then use it for CGST & SGST..... And the clauses of sub-section (5) state first use CGST for CGST and then IGST, and also first use SGST for SGST and IGST ...... and also that CGST cannot be used for SGST and SGST cannot be used for CGST payment......


sudha reddy

sudha reddy

Moderator

25-Mar-21 12:26