THE CHHATTISGARH GOODS AND SERVICES TAX ACT, 2017 Circular & Advance Ruling
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Body Circular No. 28/2019, No./ST/Tech//2019/4884, Dated :29th April, 2019

Circular No. 98/17/2019-GST

Subject: Clarification in respect of utilisation of input tax credit under GST - Reg.

Section 49 was amended and Section 49A and Section 49B were inserted vide Chhattisgarh Goods and Services Tax (Amendment) Act. 2018 [hereinafter referred to as the CGGST (Amendment) Act], The amended provisions came into effect from 1st February, 2019.

2. The Central Board of Indirect Taxes & Customs (CBIC) has issued circular No. 98/17/2019-GST dated 23rd April, 2019 to address various issued regarding challenges being faced by taxpayers in respect of utilization of input tax credit. In accordance with circular issued by CBIC and in order to ensure uniformity in the implementation of the provisions of the law across the State, the Commissioner, in exercise of its powers conferred by section 168 of the CGGST Act, hereby clarifies the issues raised as below.

3. The newly inserted Section 49A of the CGGST Act provides that the input tax credit of Integrated tax has to be utilized completely before input tax credit of State tax can be utilized for discharge of any tax liability. Further, as per the provisions of section 49 of the CGGST Act. credit of Integrated tax has to be utilized first for payment of Integrated tax, then Central tax and then Stale tax in that order mandatorily. This led to a situation, in certain cases, where a taxpayer has to discharge his tax liability on account of one type of tax (say State tax) through electronic cash ledger, while the input tax credit on account of other type of tax (say Central tax) remains un-utilized in electronic credit ledger.

4. The newly inserted rule 88A in the CGGST Rules allows utilization of input tax credit of Integrated tax towards the payment of Central tax and State tax. or as the case may be. Union territory tax. in any order subject to the condition that the entire input tax credit on account of Integrated tax is completely exhausted first before the input tax credit on account of Central tax or State /Union territory tax can be utilized. It is clarified that after the insertion of the said rule, the order of utilization of input tax credit will be as per the order (of numerals) given below:

Input tax Credit on account of	Output liability on account of Integrated tax	Output liability on account of Central tax	Output liability on account of State tax / Union Territory tax
Integrated tax	(I)	(II) - In any order and in any proportion
(III) Input tax Credit on account of Integrated tax to be completely exhausted mandatorily
Central tax	(V)	(IV)	Not permitted
State tax / Union Territory tax	(VII)	Not permitted	(VI)

5. The following illustration would further amplify the impact of newly inserted rule 88A of the CCGST Rules:

Illustration:

Amount of Input tax Credit available and output liability under different tax heads

Head	Output Liability	Input tax Credit
Integrated tax 1000	1000	1300
Central tax	300	200
State tax / Union Territory tax	300	200
Total	1600	1700

Option 1:

Input tax Credit on account of	Discharge of output liability on account of Integrated tax	Discharge of output liability on account of Central tax	Discharge of output liability on account of State tax / Union Territory tax	Balance of Input Tax Credit
Integrated tax	1000	200	100	0
Input tax Credit on account of Integrated tax has been completely exhausted
Central tax	0	100	-	100
State tax / Union territory tax	0	-	200	0
Total	1000	300	300	100

Option 2:

Input tax Credit on account of	Discharge of output liability on account of Integrated tax	Discharge of output liability on account of Central tax	Discharge of output liability on account of State tax / Union Territory tax	Balance of Input Tax Credit
Integrated tax	1000	100	200	0
Input tax Credit on account of Integrated tax has been completely exhausted
Central tax	0	200	-	0
State tax / Union territory tax	0	-	100	100
Total	1000	300	300	100

6. Presently, the common portal supports the order of utilization of input tax credit in accordance with the provisions before implementation of the provisions of the CGGST (Amendment) Act i.e. pre-insertion of Section 49A and Section 49B of the CGGST Act, Therefore, till the new order of utilization as per newly inserted Rule 88A of the CGGST Rules is implemented on the common portal, taxpayers may continue to utilize their input tax credit as per the functionality available on the common portal.

7. It is requested that suitable trade notices may be issued to publicize the contents of this circular.

8. Difficulty if any, in implementation of the above instructions may please be brought to the notice of this office.

(Reena Babasaheb Kangale)

Commissioner, State Tax

Chhattisgarh, Raipur