Clarification In Respect Of Order Of Utilization Of Input Tax Credit Under GST

Big Relief to taxpayer in respect of Order of Utilization On Input Tax Credit. Presently, the common portal supports the order of utilization of input tax credit in accordance with the provisions before implementation of the provisions of the CGST (Amendment) Act i.e. pre-insertion of Section 49A and Section 49B of the CGST Act. Therefore, till the new order of utilization as per newly inserted Rule 88A of the CGST Rules is implemented on the common portal, taxpayers may continue to utilize their input tax credit as per the functionality available on the common portal .

New Rule 88A is inserted by a Notification No. 16/2019 – Central Tax Dated 29.03.2019 to provide relief to Taxpayer.

As Per New Rule 88A, Input tax credit on account of 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 Union territory tax, as the case may be, in any order:

Provided that 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.”

In Simple Word, the input tax credit available on account of integrated tax has first been utilised fully towards IGST then Remaining Amount may be Utilise towards CGST or SGST. It is also Clarified that taxpayers may continue to utilize their input tax credit as per the functionality available on the common portal till the new order of utilization as per newly inserted Rule 88A of the CGST Rules is implemented on the common portal

Link Of Circular:
http://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular-98-17-2019-GST.pdf;jsessionid=83DE88F3F8A235029B1F9574BDCFB4BA

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2 Responses

  1. Amit Sharma says:

    Superb

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