Input Tax Credit ITS Utilization wef 1/2/2019

Amendment for utilization of IGST-CGST-SGST with effect from 1/2/2019

Old Section 49(5)c

c) The State Tax shall first be utilised towards payment of State Tax and the amount remaining, if any, may be utilised towards payment of Integrated Tax

Additions wef 1/2/2019

“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;”;

EFFFECT AMENDMENT IS TO MAKE PROVISIONS ACCORDING TO SYSTEM ALREADY DOING

Provisions Before Amendment  the assessee can do but system is not doing

                                                                        IGST                               CGST                     SGST

                                Credit Available                       0.00                        15000                    6000

IGST  (Due 16000)                                                                                 10000                    6000

CGST (Due 0 )

SGST (Due 0)

After amendment (System already doing this)

                                                                        IGST              CGST                    SGST

                                Credit Available             0.00                 15000                    6000

IGST  (Due 16000)                                                               15000                    1000

CGST (Due 0 )

SGST (Due 0)

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.

(Important wordiong is “Not withstanding containedin Section 49) meaning Section 49A will be supreme over section 49)

Next important word is FULLY utilized not FIRST utilized

EFFECT OF AMENDEMENT

BEFORE AMENDMENT

                                                            IGST      CGST         SGST       TOTAL

CREDIT AVAILABLE                       55000   20000          20000         95000

IGST (25000)                                      25000                                           25000

CGST (15000)                                                  15000                               15000

SGST (15000)                                                                      15000           15000

CLOSING BALANCE                       30000    5000            5000           40000

AFTER AMENDMENT

                                                            IGST        CGST       SGST            TOTAL

CREDIT AVAILABLE                       55000     20000         20000             95000

IGST (25000)                                       25000                                              25000

CGST (15000)                                      15000                                             15000

SGST (15000)                                     15000                                              15000

CLOSING BALANCE                            0      20000           20000           40000