An important amendment to CGST Rules have been made to give flexibility in utilizing ITC of Integrated Tax. A new rule 88A is inserted in CGST Rules, according to which ITC of integrated tax can be utilized to pay CGST and SGST or UTGST liability, in any order. It further provides restriction on utilization of ITC of CGST and SGST or UTGST towards payment of GST liability of same and different head, as the case may be, until ITC of IGST is fully exhausted.
Input tax credit on account of integrated tax shall first be utilized towards payment of integrated tax, and the amount remaining, if any, may be utilized 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 utilized 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 utilized fully.”
Position where Act prevails over rules.
Situation as per CGST Act is different. Section 49(5)(a) reads as, integrated tax shall first be utilized towards payment of integrated tax and the amount remaining, if any, may be utilized towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order.
