As per newly inserted Section 49A, ITC on account of CGST and SGST can be utilised towards payment of CGST, SGST and IGST as the case may be only after ITC available on account of IGST has been fully exhausted towards payment of such taxes. It means that IGST has to be fully exhausted first and thereafter ITC of other taxes such as CGST and SGST can be utilised for payment of taxes under respective head.
The Section 49A is applicable from 1 February 2019, however, presently the GSTN portal is not permitting payment in the revised manner and payment is allowed in terms of the provisions as applicable prior to 1 Feb 2019 (i.e. old manner in terms of Section 49). This has created lot of confusion in the trade and industry as relevant Notifications mentioned below as well do not refer to Section 49A.
Notification No. 34/2018 – Central Tax, dated 10 August 2018 (http://www.cbic.gov.in/resources...), is issued with regards to due dates for filing of GSTR - 3B return for the each of the period from July 2018 to March 2019 and payment of taxes for the respective periods provides for such payment of taxes in accordance with provisions of Section 49. The said Notification is not amended so as to align with provisions of newly inserted Section 49A
Notification No. 13/2019 – Central Tax, dated 7 March 2019 (http://www.cbic.gov.in/resources...), is issued for the subsequent period from April 2019 to June 2019. The said Notification also provides that payment of taxes for discharge of tax liability as per FORM GSTR-3B should be made in accordance with Section 49 and does not refer to Section 49A even when such Notification is issued after Section 49A is made effective.
Accordingly, till such time matter is properly clarified by CBIC and GSTN return utility is modified to permit manner of payment as specified in the amended Section 49A, it is suggested that payments of the respective taxes are made as per Section 49 i.e. old manner.
However, a query raised with GST helpdesk in this regard received following response:
Resolution: This is in reference to your concern regarding new offset functionality in GSTR-3B. We would like to inform you that currently new offset functionality is not available on GST Portal. So, we request you to wait for the same and keep yourself updated with www.gst.gov.in.
To avoid any disputes with the Department, it is suggested that query may be raised with GSTN help desk and response received may be kept as evidence for any future response.
The author can also be reached at canilesh14@gmail.com
DISCLAIMER: The views expressed are strictly of the Optitax's Consulting LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. firm and its affiliates shall not accept any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon
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