Can IGST tax be transferred from one GSTIN to SGST tax of another GSTIN under the same PAN?
Summary: The introduction of Form GST PMT-09 and insertion of Rule 87(14) of the CGST Rules have eased long-standing cash-flow constraints for taxpayers holding multiple GST registrations under the same PAN. Earlier, GST law treated each GSTIN as a distinct person, prohibiting any transfer of cash balances between registrations and limiting PMT-09 to reallocation within the same GSTIN, which often left excess cash blocked despite genuine liabilities elsewhere. With Notification No. 14/2022, Rule 87(14) now permits transfer of unutilised cash lying in the Electronic Cash Ledger from one GSTIN to another GSTIN under the same PAN, subject to conditions such as absence of outstanding liability in the transferring registration. This facility operates strictly at the cash-ledger level and does not involve input tax credit. After transfer, the receiving GSTIN may further reallocate IGST cash to SGST within the same registration using PMT-09. While each GSTIN retains its independent legal identity and head-wise payment rules remain intact, the amendment provides limited, practical flexibility for efficient tax payments and compliance.
This question has assumed significant importance after the introduction of Form GST PMT-09 and the subsequent amendment to Rule 87 of the CGST Rules. Taxpayers having multiple GST registrations under the same PAN often face situations where excess cash lies unutilised in one GSTIN, while another GSTIN requires payment of tax. The issue becomes more complex when such transferred amounts are intended to be used towards SGST liability.
Position under GST Law Prior to Amendment
Originally, GST law did not permit transfer of cash balance from one GSTIN to another GSTIN, even if both registrations were held under the same PAN. Each GSTIN was treated as a distinct person, and the E-Cash Ledger of one registration was completely insulated from another.
Form GST PMT-09 was restricted only to reallocation of amounts within the same GSTIN, i.e., between different major or minor heads of tax.
This resulted in practical hardship, particularly for large organisations with multiple registrations, as cash remained blocked despite genuine tax requirements elsewhere.
Insertion of Rule 87(14) and Legislative Intent
To address this difficulty, Rule 87(14) was inserted in the CGST Rules vide Notification No. 14/2022 – Central Tax dated 5 July 2022. This amendment permits a registered person to transfer the amount available in the Electronic Cash Ledger of one GSTIN to another GSTIN under the same PAN, subject to prescribed conditions.
The GST portal has since enabled this facility through Form GST PMT-09.
Transfer of IGST Cash from One GSTIN to Another GSTIN under the Same PAN
After the amendment, it is now legally permissible to transfer IGST cash balance from one GSTIN to another GSTIN belonging to the same PAN by filing Form GST PMT-09.
Such transfer is allowed only where the amount is lying unutilised in the Electronic Cash Ledger and there is no outstanding liability in the transferring GSTIN. The transfer operates strictly at the cash ledger level and does not involve input tax credit in any manner.
It is important to note that the amendment does not dilute the principle that each GSTIN remains a separate taxable person. The facility is limited and conditional.
Reallocation of IGST Cash to SGST Cash within the Same GSTIN
Once IGST cash balance is validly transferred to the receiving GSTIN, the law permits intra-GSTIN reallocation of such cash balance.
Using another Form GST PMT-09, the taxpayer may transfer IGST cash to SGST cash within the same GSTIN. This is permissible as Rule 87 allows reallocation between major heads within the Electronic Cash Ledger of a single registration.
This step is particularly relevant where the outward supplies of the receiving GSTIN attract higher SGST liability.
Scope and Limits of the Amendment
The aendment does not introduce PAN-level pooling of GST liabilities. Each GSTIN continues to maintain its independent legal identity. However, the amendment provides limited flexibility by allowing transfer of IGST and CGST cash balances between GSTINs under the same PAN and subsequent reallocation within a GSTIN.
Statutory dues such as interest, penalty, and late fee remain governed by strict head-wise payment rules.
Conclusion
In view of the amendment to Rule 87, IGST cash balance can now be transferred from one GSTIN to another GSTIN under the same PAN using Form GST PMT-09, subject to fulfilment of conditions. Thereafter, within the receiving GSTIN, such IGST cash may be reallocated to SGST tax using another PMT-09.
A clear understanding of this legal framework is essential to ensure proper compliance and to avoid future disputes during audit or assessment proceedings.
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