Tax Solutions

01/02/2025

30/01/2025

Changes for hotel industry .....

28/01/2025

The Input Tax Credit (ITC) set-off rules under GST (Goods and Services Tax) specify the order in which input tax credit can be utilized to pay off tax liabilities. Here’s how it works:

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ITC Set-Off Rules:

1. For IGST Liability (Integrated GST):

First: Set off against IGST credit.

Then: Use CGST credit, if IGST credit is insufficient.

Lastly: Use SGST/UTGST credit.

2. For CGST Liability (Central GST):

First: Set off against CGST credit.

Then: Use IGST credit, if CGST credit is insufficient.

Note: SGST/UTGST credit cannot be used to pay CGST liability.

3. For SGST/UTGST Liability (State GST/Union Territory GST):

First: Set off against SGST/UTGST credit.

Then: Use IGST credit, if SGST/UTGST credit is insufficient.

Note: CGST credit cannot be used to pay SGST/UTGST liability.

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Illustration:

Suppose your ITC balances are:

IGST: ₹5,000

CGST: ₹3,000

SGST: ₹2,000

And your output tax liabilities are:

IGST: ₹4,000

CGST: ₹2,500

SGST: ₹1,500

The set-off will happen as follows:

1. For IGST Liability (₹4,000):

₹4,000 will be adjusted using IGST credit.

Remaining IGST credit = ₹1,000.

2. For CGST Liability (₹2,500):

₹2,500 will be adjusted using CGST credit.

Remaining CGST credit = ₹500.

3. For SGST Liability (₹1,500):

₹1,500 will be adjusted using SGST credit.

Remaining SGST credit = ₹500.

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Important Points to Remember:

1. ITC can only be utilized if it is eligible and properly claimed in GST returns (e.g., GSTR-3B).

2. CGST and SGST/UTGST credits cannot be cross-utilized. CGST credit is used only for CGST liability, and SGST credit is used only for SGST liability.

3. IGST credit is the most flexible and can be used to pay IGST, CGST, or SGST liabilities in the prescribed order .

26/01/2025

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25/01/2025

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11/12/2024

GSTR 9 Advisory FY 23-24

04/12/2024

This opinion is based on my minimal knowledge on the issue. But this judgment is not setting a precedent. It is too much on facts of the case. No provision was interpreted. Diverse opinions are most welcome.

28/11/2024

Big ticket Scn - adjudication or writ