SET OFF RULES WEF 01.02.2019.

As per CGST Amendment act 2018, the set off rules has been changed the updated rules are presented with examples as follows:

Section 49(2),5(c),5(d)

Amended proviso 5(c)

“Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;”;

Amended proviso 5(D)

in clause (d), the following proviso shall be inserted, namely:–– “Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;

Let us understand with example:

IGST Liability: 15000.

CGST Input: 10,000.

SGST Input: 10,000.

Answer:

Old Rule: New Rule:
SGST: 10,000.

CGST: 5,000.

CGST Input: 10,000.

SGST Input: 5,000.

New Provision Section 49A

“49A. Notwithstanding anything contained in section 49, the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment.

Implication of such provision:

As per author view the implication of such provision is that, we have to first utilize input tax credit of IGST, and then use CGST/SGST input tax credit for the balance liability.

Let us Understand with following Chart:

As per old law: The Following sequences are required to be maintained:

IGST LIABILITY CGST LIABILITY SGST LIABILITY
• IGST CREDIT

• CGST OR SGST CREDIT

• CGST CREDIT

• IGST CREDIT

• SGST CREDIT

• IGST CREDIT

As per New Amended CGST Law: The Following sequences are required to be maintained:

IGST LIABILITY
CGST LIABILITY SGST LIABILITY
• IGST CREDIT

• CGST CREDIT

• SGST CREDIT

• IGST CREDIT

• CGST CREDIT

• IGST CREDIT

• SGST CREDIT

After the insertion of new provision of section 49A it seems that the registered person needs to pay GST in certain situation which was not the case earlier.

Let us understand with example:

Old Scenario
Credit Amount Liability Adjustment Ist Adjustment IInd Balance Pay
IGST 20 0 0
CGST 20 30 Rs 30-20 (CGST C) Rs 10-10 (IGST C) 0
SGST 20 30 Rs 30-20 (SGST C) Rs 10-10 (IGST C) 0
New Scenario
Credit Amount Liability Adjustment Ist Adjustment IInd Balance Pay
IGST 20 0 0 0 0
CGST 20 30 Rs 30-20 (IGST C) Rs 10-10 (CGST C) 0
SGST 20 30 Rs 30-20 (SGST C) 10
As per Author view, In Amended Scenario it seems that dealer required to pay tax as in previous scenario the liability of GST get adjusted towards inputs.

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24 Comments

  1. C PRABHAKARAN says:

    THE GOVERNMENT IS NOT CLEAR ON THEIR ACTIONS REGARDING GST IMPLEMENTATIONS.
    EVERY OTHER DAY THEY ARE CHANGING THEIR
    POLICY AND TRYING TO LOOT THE INNOCENT
    TAX PAYERS. HOW LONG THEY WILL CONTINUE
    TO LOOT MONEY LIKE THIS. THE PRESENT POLICY OF GST IS NOT FRIENDLY WITH TAX PAYERS. THEIR AIM IS TO LOOT THE MONEY FROM PUBLIC AND THOSE WHO ARE SITTING ON POLICY IMPLEMENTATION IN THE DEPARTMENT ARE ABSOLUTELY NOT CONCERNED ABOUT THE PUBLIC.

  2. chiranjeevi says:

    July-18 IGST INPUT in GSTR3B-80000/-,CGST INPUT-20000/- and SGST INPUT-20000/- OUTPUT CGST-20000/- and OUTPUT SGST-20000/-. I wrongly taken IGST input 80000/- instead of 40000/- next month Aug-18 i have 50000/- igst input and in this month i have to reverse input 40000/-.this amount(40000) where will i show in aug-18 return can i take10000/- IGST input in GSTR3B or in IGST ITC mentioned 50000 and reverse IGST input have 40000

  3. subba rao says:

    IGST OUTPUT = 129496
    CGST OUTPUT = 630410 ( includes 10,840 RCM )
    SGST OUTPUT = 630410 ( includes 10,840 RCM )
    IGST INPUT = 829984
    CGST INPUT = 265444 ( includes 10,840 RCM )
    SGST INPUT = 265444 ( includes 10,840 RCM )

    Please explain how much GST payable under what head ( IGST, CGST, SGST ). If any credit balance is there in any of 3 accounts ( IGST, CGST, SGST ), how to adjust the same in next month.

  4. Rajiv Mota says:

    inputs igst 19,46,458 , cgst 6,68,961, utgst 6,57,961
    liability igst 33,07,888 , cgst 60,393 , utgst 60393

    pl.inform we should pay igst rs. 1,02,518/-
    is it correct

  5. G. Mahender says:

    ITC:
    IGST:- 12,00,000/-
    CGST :- 2,00,000/-
    SGST :- 2,00,000/-

    LIABILITIES:-
    IGST :- 30,00,000/-
    CGST :- 3,00,000/-
    SGST :- 3,00,000/-
    HOW TO SET OFF THIS LIABILITY?

  6. Bhuwan Suteri says:

    please update.
    if input in IGST Rs. 100 and payable 150/-
    CGST Input 100/- and payable 150/-
    SGST Input 100/- and payable 150/-
    what is the method of setoff?
    which tax type will be paid thru cash.

  7. X M Pereira says:

    I have liability of IGST-0, CGST-4977,SGST-4977 and ITC of IGST-14400, CGST-34234, SGST-141979 when i am trying to offset my laibility as per new provision shows me this error message – offset the CGST credit against the CGST liability first before cross-utilization.If error persists quote error number LG9069 when you contact customer care for quick resolution.

  8. Jainish Parikh says:

    ITC:
    IGST:- 12,00,000/-
    CGST :- 5,00,000/-
    SGST :- 5,00,000/-

    SALES:-
    IGST :- 80,00,000/-
    CGST :- 3,00,000/-
    SGST :- 3,00,000/-
    HOW TO SET OFF THIS LIABILITY?
    WHETHER THERE WILL BE ANY PAYMENT OF CGST AND SGST IN THIS CASE?

  9. anas khan says:

    if we have payables of the following
    igst 15000 cgst 10000 sgst 10000
    and we have itc of the followings
    igst 10000 cgst 12000 and sgst 12000
    then how can we set it off??

  10. Mohan Bagalkot says:

    On GST Portal system is still calculated ITC Utilization as per old system. Whether we have to go with ITC Utilization as per system calculated or we have change manually as per new set off rule?

    1. murugesh says:

      Hi tax guru team,

      i think the below example given by you is wrong: since its no change in IGST output demand.

      Let us understand with example:

      IGST Liability: 15000.

      CGST Input: 10,000.

      SGST Input: 10,000.

      Answer:
      Old Rule: New Rule:
      SGST: 10,000.

      CGST: 5,000.
      CGST Input: 10,000.

      SGST Input: 5,000.

      1. fcasameer says:

        Respected Sir,

        Please carefully ready my article as i haven’t mentioned any liability in it, as i stated Liability of SGST and CGST and Input of CGST/SGST/IGST

  11. Dhananjaya says:

    SET OFF COMPUTATION
    CGST SGST IGST
    out put gst 510243 510243 91779
    Less: ITC
    IGST 365012 0 91779
    SGST 0 254164 0
    CGST 254164 0 0
    -108963 254164 0
    Here u pay tax the amount of RS 254264 SGST and in CGST case ITC will b 108963

  12. S.N.DEY says:

    NEW RULE 01/02/2019+
    TEST
    IGST CGST SGST TOTAL
    ITC 456821 254164 254164 965149 ITC
    LIABI. 91779 510243 510243 1112265 Liabilities

    FIND GST SET OFF

    IGST CGST SGST
    ITC 456821 254164 254164
    Set off IGST 91779
    Balance 365042
    CGST 365042 145201
    Balance 0 108963

    SGST 254164
    PAID CASH SGST 256079 256079

  13. Vijay Gupta says:

    IF Igst input Rs. 1000/- Cgst Input Rs. 1000/- & Sgst Input Rs. 1000/- And Output Tax Igst Rs. 1500/- Cgst Output Rs. 800/- & Sgst Output Rs. 800/- then how will adjust

  14. vinayak khatavkar says:

    INPUT – IGST RS. 456821/-, CGST RS. 254164/- AND SGST RS. 254164/-
    OUTPUT – IGST RS. 91779/-, CGST RS.510243/- AND SGST RS. 510243/-
    PLEASE DO THE WORKING OF GST AS NEW LAW

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