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Best Ways/Steps to utilise GST Input Tax Credit (ITC)

Writer's picture: CA.Vipul JainCA.Vipul Jain

Updated: Apr 2, 2023

Here are the steps, which should be followed for utilisation of ITC:


Step 1:

ITC of IGST to be utilised with IGST Liability {Sec. 49(5)(a)}


Step 2:

ITC of IGST can be utilised with CGST and SGST/UTGST in any order/proportion

{Sec 49A having overriding effect and Rule 88A}

THIS STEP IS VERY IMPORTANT. ONE SHOULD BE VERY CAREFUL WHILE APPLYING THIS STEP. THIS STEP CAN HELP TO REDUCE YOUR CASH OUTFLOW IN MAKING GST PAYMENT


Step 3:

ITC of CGST to be utilised with CGST Liability {Sec. 49(5)(b)}

And

ITC of SGST/UTGST to be utilised with SGST/UTGST Liability {Sec. 49(5)(c)/(d)}


Step 4:

Remaining ITC of CGST to be utilised with ITC of IGST {Proviso to Sec 49(5)(b)}


Step 5:

Remaining ITC of SGST/UTGST to be utilised with ITC of IGST {Proviso to Sec 49(5)(c)/(d)}


WE ARE ATTACHING HEREWITH AN EXCEL FILE WHICH WILL HELP IN REDUCING YOUR CASH OUTFLOW




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