Referencer for Quick

Revision
Final Course Paper-8: Indirect
Tax Laws
A compendium of subject-wise capsules published in the
monthly journal “The Chartered Accountant Student”

Board of Studies
(Academic)
ICAI
INDEX
Page Edition of Students’
Topics
No. Journal
1-4 January 2020 Accounts and Records; E-way Bill
Tax Deduction at Source and Collection of
4-6 January 2020
Tax at Source
6 January 2020 Offences and Penalties
7 January 2020 Demands and Recovery
7-10 January 2020 Input Tax Credit
idtl
goods and services tax: a capsule for quick recap
It has always been the endeavour of Board of Studies to provide quality academic inputs to the students of
Chartered Accountancy Course. Keeping with this objective, BoS has come up with a crisp and concise capsule
on Part I: Goods and Services Tax (GST) of Paper 8: Indirect Tax Laws of Final Course (Old as well as New), to
facilitate students in quick revision before examination. The Capsule makes use of diagrams, tables, flow charts
etc. to facilitate recap of select topics of GST law namely, Accounts & Records; E-Way Bill, Tax deducted at source,
Tax collected at source, Offences & Penalties & significant provisions of Demands and Recovery and Input Tax
Credit*. The capsule is based on the GST law as amended by the significant notifications/circulars issued till
31st October, 2019 and is thus, relevant for students appearing in May, 2020 examination. Students may note
that this capsule is a tool for quick revision and thus, should not be taken as a substitute for the detailed study of
the subject. Students are advised to refer to the October 2019 Edition of Final Course Study Material along with
Statutory Update for May 2020 examination which will be hosted on the ICAI website, for comprehensive study
and revision.
*which have been amended during the last year

ACCOUNTS AND RECORDS; E-WAY BILL

1. Who is required to maintain his books of accounts and at
which place?
Every registered person
is required to maintain his books
of accounts at
APoB1 PPoB2
1 Additional place of business
2 Principal place of businessa
2. Accounts and records required to be maintained
A true and correct account of
following is to be maintained:
Records which are to be maintained only by a supplier
other than a supplier opting for composition levy
Account of stock of goods Account of details of tax
received and supplied payable,collected and paid,
including opening balance, ITC claimed, together with
receipt, supply, goods lost/ register of tax invoice,
stolen, gifted, free samples, credit-debit notes, delivery
APoB stock balance. challan issued/received
during any tax period
3. Records to be maintained by agent
Authorisation received
from each principal to Particulars of goods/
receive/supply goods/ services received/
services on behalf of supplied on behalf of
every principal
such principal;

Tax paid on receipts/

Details of accounts supply of goods/
Production or Inward Stock ITC Output Records furnished to every services effected
manufacture and of availed tax pescribed principal on behalf of every
of goods outward goods payable by rules principal
supply of and
goods or paid
services 4. Records to be additionally maintained by a manufacturer
or both and service provider
Monthly raw materials/
production services used in
A true and correct accounts showing manufacture
account of: Manufacturer
quantitative
details of goods so
Suppliers manufactured
Reverse Goods/ services including waste
of goods/
charge imported/ and by products
services
supplies along exported
chargeable
with relevant
to tax
documents quantitative
details of goods
Separate account used in the
Names and of advances provision of
addresses of Accounts services
Service provider
showing
details of input
Recipient Address of the services utilised
of goods/ premises where and services
services goods are supplied
stored

06 January 2020 The Chartered Accountant Student

1
 idtl
5. Separate records to be maintained by a person executing
works contract Incorrect In case Each
entries, electronic volume of Books
Separate records books of accou of
records to be other than nts,
those of beng account are
Persons on maintained maintained, maintained requir
whose behalf by a person clerical ed
nature, a log of manually to b
the works executing works every entry be serially produ e
contract is contract be scored ced,
out under edited or numbered on
executed deleted deman
attestation d.
Details of and there shall be
Names and maintained.
addresses of payment No entr y to after
Supplier of received in be erased/ correct
goods/services respect of over written entry be
each works recorded.
Description, value and contract
quantity of goods/
services received
for/utilised in the 8. Audit of accounts
execution of works
contract A registered person must get his accounts audited if his
aggregate turnover during a FY exceeds R 2 crores
6. Records to be maintained by owner or operator of godown
or warehouse and transporters
Exception
Records to be maintained by owner or operator of godown or
warehouse and transporters No audit of books of accounts of the CG/SG/LA provided the
same are subject to audit by CAG of India or any statutory
auditor appointed for auditing the accounts of LA

whether such person is registered or not

Such
registered Copy of Copy of
Annual Audited Reconciliation
person is Return
records of the consigner, consignee and other relevant details of the required to annual Statement
goods in such manner as may be prescribed furnish accounts

goods transported,
Transporter Records of delivered
9. Failure to maintain the accounts
goods stored in transit
by him
• PO shall determine the tax payable on the
Failure to unaccounted goods and/or services, as if the
GSTIN of the registered maintain same had been supplied by such person
consignor and consignee the • Provisions of section 73/74 shall, mutatis
for each of his branches accounts mutandis, apply for determination of such tax

for the period for which

particular goods remain
Owner or
in the warehouse 10. Period of retention of accounts
operator of Books of
godown or accounts
warehouse including the particulars 72 months from the due date of furnishing of annual return for
relating to dispatch, the year pertaining to such accounts and records
movement, receipt, and
disposal of such goods

Where an appeal/ 1 year after final disposal of such

7. How the accounts and records will be maintained? revision/any other app e al/re v i sion/pro ce e ding s/
proceedings before investigation
any Appellate/ or
Records in electronic Proper electronic back-up of Revisional Authority 72 months from the due date of
form be authenticated records be maintained and or Appellate furnishing of annual return for the
by a digital preserved Tribunal or Court, year pertaining to such accounts
signature Records in electronic form or an investigation is and records
(Books of account include going on whichever is later
any electronic form of data
Such records need stored on any electronic Details of files,
to be prodcued, device.) their passwords
on demand, in and explanation
hard copy or in any electronically for codes, and any other info
readable format required for access

The Chartered Accountant Student January 2020 07

2
idtl
11. E-Way Bill Who can E-way bill is to be generated by the
Meaning of E-way bill is an electronic document generate the registered consignor or consignee (if the
e-way bill generated on the GST portal evidencing e-way bill? transportation is being done in own/hired
and why is it movement of goods. conveyance or by railways by air or by vessel)
required? or the transporter (if the goods are handed
Section 68 of the CGST Act, 2017 mandates
that the Government may require the person over to a transporter for transportation by
in charge of a conveyance carrying any road).
consignment of goods of value exceeding Where neither the consignor nor
such amount as may be specified to carry consignee generates the e-way bill and the
with him such documents and such devices value of goods is more than R 50,000/- it shall
as may be prescribed. be the responsibility of the transporter to
Rule 138 of CGST Rules, 2017 prescribes generate it.
e-way bill as the document to be carried Other points ♦ Goods transported by railways shall be
for the consignment of goods in certain delivered only on production of e-way
prescribed cases. bill.
When is E-way Bill is mandatory in case of movement ♦ E-way bill can be generated even if
required to be of goods of consignment value exceeding consignment value is less than R 50,000.
generated? R 50,000. Details of In case of intra-State movement of goods
Movement should be: c o n v e y a n c e upto 50 km distance:
(i) in relation to a supply; or may not be ♦ from place of business (PoB) of
(ii) for reasons other than supply; or furnished in consignor to PoB of transporter for
(iii) due to inward supply from an Part-B further transportation or
unregistered person, ♦ from PoB of transporter finally to PoB of
Registered person causing movement of the consignee.
goods shall furnish the information relating T r a n s f e r In such cases, the transporter or generator
to the said goods in Part A of Form GST of goods of the e-way bill shall update the new vehicle
EWB-01 before commencement of such to another number in Part B of the EWB before such
movement. conveyance transfer and further movement of goods.
Exceptions to minimum consignment Consolidated After e-way bill has been generated, where
value of R 50,000 E-way Bill in multiple consignments are intended to
♦ Inter-State transfer of goods by principal case of road be transported in one conveyance, the
to job-worker transport transporter may indicate the serial number
♦ Inter-State transfer of handicraft goods of e-way bills generated in respect of each
by a person exempted from obtaining such consignment electronically on the
registration common portal and a consolidated e-way bill
Who causes If supplier is registered and undertakes to in Form GST EWB-02 may be generated by
movement of transport the goods, movement of goods is him on the said common portal prior to the
goods? caused by the supplier. If recipient arranges movement of goods.
transport, movement would be caused by
him. Where the consignor/consignee has not
If goods are supplied by an unregistered generated the e-way bill in Form GST EWB-01
supplier to a registered known recipient, and the aggregate of the consignment value of
movement shall be caused by such recipient. goods carried in the conveyance is more than
Information Part A: to be Part B: to be furnished R 50,000, the transporter shall generate
to be furnished by by the person who individual Form GST EWB-01 on the basis
furnished in the registered is transporting the of invoice or bill of supply or delivery challan
e-way bill person** who is goods. and may also generate a consolidated e-way
causing movement bill in Form GST EWB-02 prior to the
of goods. movement of goods [This provision is not
**However, information in Part-A may be yet effective].
furnished: Cancellation E-way bill can be cancelled if either goods
♦ by the transporter if so authorised or of e-way bill are not transported or are not transported
♦ by the e-commerce operator/courier as per the details furnished in the e-way bill.
agency, where the goods are supplied The e-way bill can be cancelled within 24
through them. hours from the time of generation.

08 January 2020 The Chartered Accountant Student

3
 idtl
V a l i d i t y Sl. Distance Validity period from Is e-way bill E-way bill is not required to be generated in
period of No. within relevant date required in all certain specified cases.
e-way bill/ country cases?
consolidated D o c ument s/ ♦ invoice or bill of supply or delivery
1. Up to 100 km One day in cases
e-way bill other than Over devices to be challan
Dimensional Cargo carried by a ♦ copy of the e-way bill in physical form or
or multimodal person-in- the e-way bill number in electronic form
shipment in which at charge of a or mapped to a RFID embedded on to
least one leg involves conveyance
the conveyance
transport by ship Verification Commissioner or an officer empowered by
2. For every One additional day in of documents him in this behalf may authorise the proper
100 km or cases other than Over and officer to intercept any conveyance to verify
part thereof Dimensional Cargo conveyances the e-way bill or the e-way bill number in
thereafter or multimodal
physical form for all inter-State and intra-
shipment in which at
State movement of goods.
least one leg involves
transport by ship Physical verification of a specific conveyance
3. Up to 20 km One day in case of can also be carried out by any officer, on
Over Dimensional receipt of specific information on evasion of
Cargo or multimodal tax, after obtaining necessary approval of the
shipment in which at Commissioner or an officer authorised by
least one leg involves
him in this behalf.
transport by ship
Inspection A summary report of every inspection of
4. For every One additional day and goods in transit shall be recorded online
20 km or in case of Over verification of on the common portal by the proper officer
part thereof Dimensional Cargo goods within 24 hours of inspection and the final
thereafter or multimodal
report shall be recorded within 3 days of
shipment in which at
such inspection.
least one leg involves
transport by ship Once physical verification of goods being
transported on any conveyance has been
Acceptance/ The person causing movement of goods
done during transit at one place within
rejection of shall generate the e-way bill specifying the
the State or in any other State, no further
e-way bill details of other person as a recipient who can
physical verification of the said conveyance
communicate the acceptance or rejection of shall be carried out again in the State, unless
such consignment specified in the e-way a specific information relating to evasion of
bill. If the acceptance or rejection is not tax is made available subsequently. Where
communicated within 72 hours from the a vehicle has been intercepted and detained
time of generation of e-way Bill or the time of for a period exceeding 30 minutes, the
delivery of goods whichever is earlier, it will transporter may upload the said information
be deemed that he has accepted the details. in on the common portal.

TAX DEDUCTION AT SOURCE

AND COLLECTION OF TAX AT SOURCE
Definition of Key terms

Electronic Commerce

means including digital products over

supply of goods supply of services supply of goods and services digital network electronic network

The Chartered Accountant Student January 2020 09

4
idtl
Electronic Commerce Operator TDS
RATE OF TDS
Rate of TDS
means Any person who

under CGST under IGST

owns operates manages
1% 2%

digital/electronic facility/platform for electronic commerce

TDS

Person liable to Due date of payment

deduct tax at source Threshold limit Rate of deduction NO TDS of TDS to Government

Central and State Total value of supply When location of

Government 1% Within 10 days from
under a contract > supplier and place the end of month
R 2.5 lakhs, exclusive of supply is different
of gst as per invoice from the state of
registration of
Local authority
recipient

Governmental
agencies

Notified persons

Manner Of Account Of TDS By TDS Deductor Consequences Of Not Complying With TDS Provisions
1. Such deductors need to get compulsorily registered under S. No. Event Consequence
section 24 of the CGST/SGST Act. 1. TDS not deducted Interest to be paid along
2. They need to remit such TDS collected by the 10th day of the with the TDS amount;
month succeeding the month in which TDS was collected. else the amount shall be
3. The amount deposited as TDS will be reflected in the determined and recovered
electronic cash ledger of the supplier. as per the law
4. They need to issue certificate of such TDS to the deductee 2. TDS certificate not issued Late fee of R 100/- per
within 5 days of deducting TDS failing which fees of R 100 or delayed beyond the day subject to a maximum
per day subject to maximum of R 5,000/- will be payable by prescribed period of five amount of R 5000/-
such deductor. days
Manner Of Account Of TDS By Supplier 3. TDS deducted but not Interest to be paid along
paid to the Government or with the TDS amount;
♦ Any amount shown as TDS will be reflected in the paid later than 10th of the else the amount shall be
electronic cash ledger of the concerned supplier. succeeding month determined and recovered
♦ as per the law
He can utilize this amount towards discharging his
liability towards tax, interest, fees and any other 4. Late filing of TDS Late fee of R100/- for every
returns day during which such
amount. failure continues, subject
Applicability Of TDS to a maximum amount of
R 5,000.
Situations
TCS
Supplier, place Supplier Supplier & place of RATE OF TCS
of supply & and place supply - same State &
recipient- of supply- recipient located in Rate of TCS
same State different States another State

Intra-State Inter-State Intra-State supply

supply supply under CGST under IGST
NO TDS
TDS (CGST + TDS (IGST)
SGST) to be to be
deducted deducted 1/2% 1%

10 January 2020 The Chartered Accountant Student

5
 idtl
TCS Net Value of Taxable Supplies

other than notified

Aggregate value services under section
Person Due date 9(5) by all registered
Threshold Value for of taxable supplies
liable to Rate of of payment persons
limit collection of of goods and/or
collect tax collection of TCS to services
tax at source
at source Government
Net value
of Taxable
Supplies
1% Net value Within 10
Electronic
Nil [(CGST + of taxable days from taxable supplies
commerce
SGST) supply the end of returned to
operator supplier
/IGST] month

OFFENCES & PENALTIES

1 2 3

Section 122(1)- Section 122(2)-Tax not paid, short paid or Section 122(3)-
Offences related to invoices, erroneously refunded or ITC has been wrongly • Assists or abets offences mentioned in Note-1
transportation, payment of tax, availed or utilized • Acquire possession/concerns in dealing
ITC, refund, tax deduction or goods which he knows or reason to believe
collection, furnishing of false are liable to confiscation such as transport,
records or information, etc. (for Fraud Other
remove, keeps, conceals, supply or purchase.
details refer Note-1) Higher of R10,000 Higher of R10,000 • Receives/deals with supply of services which
or 100% of tax due or 10% of tax due he knows or reasons to believe are liable to
contravention of Act/Rules
• Fails to appear when summon is issued to give
R10,000 or an amount equivalent 4 evidence/produce a document
to tax evaded/tax not deducted/
collected/not paid to the • Fa to issue invoice or account for in
government/ITC availed, passed or Section123- R100 per day for which accordance with provision
distributed irregularly/fraudulently Fails to furnish information failure continues.
claimed refund, whichever is return within the period as Maximum R5,000
higher. specified in notice
Upto
R25,000
Section 124- • Fine upto R10,000
Section Fails to furnish statistics • In continuing offence
132-Prosecution without reasonable cause / R100 per day.
willfully furnishes any false Maximum Section 125- No penalty is provided
information/ return R 25,000 separately

> R 500L R 500L<&>R 200L R 200<&>R 100 L Aids/abets commission of offence

Upto 5 years Upto 3 years Upto 1 year

and fine and fine and fine Upto 6 months/ fine/
both
Not less than 6 months
On 2nd Conviction Punishment will extend to 5 years and fine. Minimum 6 months

Note-1
1. Supplies of goods/services made without invoice/ false invoice, invoices or bills issued without any supply of goods/services, transports
taxable goods without document cover.
2. Collects tax, but fails to pay to Government within 3 months from due date of payment.
3. Fails to deduct any tax or collect tax, deduct or collect lesser amount of tax, failed to pay the same to Government.
4. Takes or utilizes ITC or distributes ITC in contravention of the Act.
5. Obtains refund fraudulently.
6. Falsifies or substitutes financial records/ produces fake accounts/ furnishes false information with an intention to evade tax/ suppresses the
turnover in order to evade tax.
7. Fails to obtain registration/ furnishes false particulars with regard to registration/ issues invoices using registration number of another person.
8. Obstructs or prevents officer in discharge of his duties.
9. Fails to keep, maintain or retain books of accounts.
10. Fails to furnish information or documents/ furnishes false information during any proceedings.
11. Supplies, transports or stores goods which person has a reason to believe are liable for confiscation.
12. Tampers with or destroys any material evidence or document. Disposes off or tampers any goods that have been detained, seized or attached.
13. Transporting any taxable goods without cover of documents

The Chartered Accountant Student January 2020 11

6
idtl

Demands and recovery

S. Action by tax payer Amount of penalty payable Remarks
No. Normal Cases Fraud Cases
1. Tax amount, along with the interest, paid No penalty and no notice shall 15% of the tax amount payable as The penalty
before issuance of notice be issued penalty and no notice shall be not shall also be not
be issued chargeable in
2. Tax amount, along with the interest, paid No penalty. All proceedings 25% of the tax amount payable as cases where the
within 30 days of issuance of notice deemed to be concluded penalty. All proceedings deemed to self-assessed tax
be concluded. or any amount
3. Tax amount, along with the interest, 10% of the tax amount or 50% of the tax amount payable as collected as tax
paid within 30 days of communication R10,000/-, whichever is penalty. All proceedings deemed is paid (with
of order higher to be concluded. interest) within
4. Tax amount, along with the interest, paid 10% of the tax amount or 100% of the tax amount 30 days from
after 30 days of communication of order R10,000/-, whichever is higher the due date of
payment.

S. No. Nature of case Time for issuance of notice Time for issuance of order
1. Normal Cases Within 2 years and 9 months from the due Within 3 years from the due date of filing of
date of filing Annual Return for the Financial Annual Return for the Financial Year to which
Year to which the demand pertains or from the the demand pertains or from the date of
date of erroneous refund erroneous refund
2. Fraud Cases Within 4 years and 6 months from the due date Within 5 years from the due date of filing of
of filing of Annual Return for the Financial Annual Return for the Financial Year to which
Year to which the demand pertains or from the the demand pertains or from the date of
date of erroneous refund erroneous refund
3. Any amount collected No time limit Within 1 year from the date of issue of notice
as tax but not paid
4. Non- payment of self- No need to issue a SCN Recovery proceedings can be started directly
assessed tax

INPUT TAX CREDIT

Eligibility and conditions for taking ITC

Registered person to take credit of tax paid used/ intended to be used in the if the following four
on inward supplies of goods and/or services course or furtherance of business conditions are fulfilled:

He has furnished Tax on such supply has He has received goods He has valid tax invoice/debit note/
return u/s 39 been paid either in/by and/or services prescribed tax paying document

Cash Utilisation of ITC Goods delivered / services Time limit for availing ITC -
provided to third person ITC pertaining to a particular FY
on the direction of the can be availed by 20th October
registered person deemed to of next FY or filing of annual
Goods If depreciation be received by the registered return, whichever is earlier.
received in lots claimed on tax person ⇒ ITC available to
– ITC allowed component, ITC registered person [Bill to Exception: Re-availment of ITC
upon receipt of not allowed Ship to Model] reversed earlier
last lot

♦ Reverse charge supplies

♦ ITC to be added to the output tax liability with interest @ 18% if ♦ Deemed supplies without
value + tax of goods and /or services is not paid within 180 days consideration
EXCEPTIONS
of the issuance of invoice. ♦ Additions made to value of
♦ On payment, the ITC could be re-availed without any time limit. supplies on account of supplier’s
liability being incurred by the
recipient of the supply

Restriction on availment of credit

ITC to be availed in respect of invoices or debit notes, the details of which have not been uploaded
by the suppliers in GSTR-1, cannot exceed 20% of eligible ITC available in respect of invoices or
debit notes the details of which have been uploaded by the suppliers in GSTR-1.

12 January 2020 The Chartered Accountant Student

7
 idtl

BLOCKED CREDITS PART-A

Ineligible MV Ves & AC GI, Servicing, R&M Leasing/renting/hiring of F&B, Outcat,

relating to ineligible MV, MV, Ves or AC on which BT, HS, C&PS,
Ves, AC ITC is disallowed LI & HI

EXCEPTIONS EXCEPTIONS EXCEPTIONS EXCEPTIONS EXCEPTIONS

When used for When used for- (i) When ineligible (i) When used (i) Where a particular
making taxable (i) making further MV, Ves or AC for making an category of such
supplies of- taxable supply are used for outward taxable inward supplies is
(i) such MV of such Ves or eligible purposes supply of the same used for making
(ii) trptn of AC (ii) When received category (sub- an outward taxable
passengers (ii) passenger trptn by manufacturer contracting) or as supply of the same
(iii) i m p a r t i n g service of ineligible MV, an element of a category - [Sub-
training on (iii) i m p a r t i n g Ves or AC taxable composite contracting] or as
driving such training on (iii) When received or mixed supply. an element of a
ineligible navigating/ by a GI service (ii) When provided taxable composite
MV flying such Ves/ provider in by an employer or mixed supply
AC respect of such to its employees (ii) When provided by
(iv) trptn of goods ineligible MV, under statutory an employer to its
Ves or AC obligation employees under a
insured by it statutory obligation

Credit available on the above exceptions

Membership of club
& health & fitness
Centre
Travel benefits Tax paid u/s 74 (Tax short / not paid
to employees on Inward supplies
received by NRTP or erroneously refunded due to fraud
vacation (LTC/HT) etc.,) 129 (Amount paid for release
of goods and conveyances in transit
which are detained) and 130 (Fine paid
in lieu of confiscation)

EXCEPTION EXCEPTION EXCEPTION

When provided by When provided by Goods imported by

an employer to its an employer to its him
employees under a employees under a
statutory obligation statutory obligation

The Chartered Accountant Student January 2020 13

8
 idtl
BLOCKED CREDITS PART-B

WCS for construction of Inward supplies received by taxable person for construction of immovable property
immovable property on his own account including when such supplies are used in the course or furtherance
of business

EXCEPTIONS EXCEPTIONS

(A) WCS for P & M (A) Construction of P & M

(B) WCS availed by a works contractor (B) Construction of immovable property
Credit available on
for further supply of WCS [Sub- for others
such exceptions
contracting] (C) Value of construction is not capitalised
(C) Where value of WCS is not
capitalized

Inward supplies charged to Goods lost/ stolen/ destroyed/

written off or disposed of by way Inward supplies used for personal
composition levy consumption
of gift or free samples

Ineligible MV-Motor vehicle for transportation (A) Construction includes re-construction/

of persons with seating capacity of ≤ 13 persons
(including driver); Ves & AC-Vessel & Aircraft; GI-
General insurance; R&M-Repairs & maintenance;
F&B-Food & beverages; Outcat-Outdoor catering;
BT-Beauty treatment; HS-Health services; C&PS-
Cosmetic & plastic surgery; LI-Life insurance; HI-
Health insurance; NRTP-Non-resident taxable
person; WCS-Works contract service; LTC-Leave
Travel Concession; HT-Home town; trptn-
transportation; P & M-Plant & machinery
renovation/ addition/ alterations/ repairs to
the extent of capitalisation to said immovable
property.
(B) P & M means apparatus, equipment, &
machinery fixed to earth by foundation or
structural supports but excludes land, building/
other civil structures, telecommunication
towers, and pipelines laid outside the factory
premises.

Utilization of ITC
ITC of Output IGST liability Output CGST liability Output SGST/ UTGST liability
IGST (I) (II) – In any order and in any proportion
(III) ITC of IGST to be completely exhausted mandatorily
CGST (V) (IV) Not permitted
SGST/UTGST (VII) Not permitted (VI)
Only after ITC of CGST has
been utilized fully
The numerals given above can be further explained in the following manner:
(I) IGST credit should be first utilized towards payment of IGST.
(II) Remaining IGST credit, if any, can be utilized towards payment of CGST and SGST/UTGST in any order and
in any proportion, i.e. remaining ITC of IGST can be utilized –
• first towards payment of CGST and then towards payment of SGST; or
• first towards payment of SGST and then towards payment of CGST; or
• towards payment of CGST and SGST simultaneously in any proportion e.g. 50: 50, 30: 70, 40: 60 and so on.
(III) Entire ITC of IGST should be fully utilized before utilizing the ITC of CGST or SGST/UTGST.
(IV) & (V) ITC of CGST should be utilized for payment of CGST and IGST in that order. ITC of CGST cannot be utilized
for payment of SGST/UTGST
(VI) & (VII) ITC of SGST /UTGST should be utilized for payment of SGST/UTGST and IGST in that order. However, ITC
of SGST/UTGST should be utilized for payment of IGST, only after ITC of CGST has been utilized fully. ITC of
SGST/UTGST cannot be utilized for payment of CGST.
• Cross-utilization of credit is available only between CGST - IGST and SGST/UTGST - IGST.
• CGST credit cannot be utilized for payment of SGST/UTGST and SGST/UTGST credit cannot be utilized for payment of
CGST.
• ITC of IGST need to be exhausted fully before proceeding to utilize the ITC of CGST and SGST in that order.

14 January 2020 The Chartered Accountant Student

9
 idtl

I. II.
III.
ITC of ITC of
ITC of
IGST CGST
IGST CGST SGST
SGST

CGST/SGST in
any order & in IGST, only
any proportion IGST when ITC of
CGST = NIL

ITC of IGST =
NIL

ITC of
ITC of
SGST/ SGST/
CGST CGST
UTGST UTGST

The Chartered Accountant Student January 2020 15

10