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

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


Best ways to utilise GST credit
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Disclaimer: The contents of this article should not be constituted as opinion. The contents are merely personal views of the author and provided for information purpose. Readers are requested to refer all the legal provisions. Author/Site Owner is not responsible for any loss, damages caused. Further, this is not an advertisement by professional involved.




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