Transfer of input tax credit

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Transfer of input tax credit 2017-04-13T23:34:19+00:00
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  • Ashish BadalaCA Ashish Badala
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    #898 |

    On utilisation of input tax credit availed under this Act for payment of tax dues under the Integrated Goods and Services Tax Act in accordance with the provisions of sub-section (5) of section 49, as reflected in the valid return furnished under sub-section (1) of section 39, the amount collected as central tax shall stand reduced by an amount equal to such credit so utilised and the Central Government shall transfer an amount equal to the amount so reduced from the central tax account to the integrated tax account in such manner and within such time as may be prescribed.

    Priya MadrechaPriya Madrecha
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    53.1    Introduction
    This Section provides simple but important modus operandi in respect of post CGST/ SGST/UGTST utilisation towards IGST liability.
    53.2    Analysis
    U/s 49 (5) (b) (c) and (d) of the Act, SGST / CGST / UTGST credits can be utilised by a tax payer on priority basis to respective SGST / CGST / UTGST dues first. Then, in case of CGST, balance, if any, can be used pay towards IGST. If used so, there shall be reduction in central tax caused by Central Government and equal credit shall be ensured to IGST in the prescribed manner.
    Such treatment shall be ensured by the Central Government for UTGST and SGST also in respective cases.
    For better clarity, it may please be noted that equivalent provision is there vide Section 18 of Integrated Goods and Services Act 2017 –
    53.3    FAQ
    Q1. If CGST is utilised to pay towards dues of IGST how the Central Government shall ensure due credit to IGST?
    Ans. There shall be reduction in CGST on such utilisation; the Central Government shall transfer equivalent amount to the credit of IGST account.
    53.4    MCQ
    Q1. Section 53 of CGST/SGST Act, 2017 provides for transfer of amount (equivalent to CGST credit utilised) by Central Government to:
    (a)    CGST A/c
    (b)    SGST A/c
    (c)    UTGST A/c
    (d)    IGST A/c
    Ans. (d) IGST A/c

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