Utilisation of Input Tax Credit – Section 49A & 49B read with Rule 88A of CGST ACT as clarified vide Circular No. 98/17/2019-GST Dated 23rd April 2019

The new order of set off is resulting in blockage of ITC of SGST & CGST, resulting in payment of taxes by taxpayers.

Illustration:-

Description Tax Payable (₹) Paid through ITC Tax/ Cess Payable in Cash (₹)
Integrated Tax (₹) Central Tax (₹) State/UT Tax (₹) Cess (₹)
1 2 3 4 5 6 7
Other than reverse charge
 Integrated Tax  –  –  –  –  –
 Central Tax  103,802  28,064  95,564  -19,826
 State/ UT Tax  103,802  –  95,564  8,238
 Cess  –  –  –

To Curve This – The new order of ITC utilization rule 88A is brought vide Notification no 16/2019 dated 29-03-2019 made effective from the 1st April 2019.

Meanwhile if ultimate tax (after taking the IGST input to pay CGST liability) is available to carry forward then we can utilize the IGST Input in proportionate basis.

(Republished with amendments)

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5 Comments

  1. Shashi says:

    Hi Sir,
    May i know is there any notification saying that the new sett off rules has been updated in the GST portal(July 2019) .

  2. ashishmaskara@hotmail.com says:

    i have downloaded your GST offset liability calculator as per new rule. Its very useful. i would like to point out one problem that in the sheet name proportionate manner reverse charges column formula is not update. Since on filing reverse charges amount in set off sheet , it should come by default in second sheet. moreover total tax payable including RCM is also showing without RCM payable. so please update it.

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