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Government has changed the GST Set off Rules by inserting section 49A in CGST Act w.e.f. 01.02.2019. Now IGST Credit is required to be set off fully before taking any set off from CGST/SGST credit. Which means earlier CGST/SGST credit was first used to be set-off with CGST/SGST liability respectively and thereafter only, IGST credit was used against CGST/SGST liability. But now IGST Credit has to be first utilised against IGST/CGST/SGST liability, even before utilisation of CGST/SGST credit.

Old GST Set off Rules up to 01/02/2019

OUTPUT	INPUT SET-OFF ORDER
IGST	IGST -> CGST -> SGST
CGST	CGST -> IGST
SGST	SGST -> IGST

New GST Set off Rules w.e.f. 01/02/2019

OUTPUT	INPUT SET-OFF ORDER
IGST	IGST -> CGST -> SGST
CGST	IGST ->CGST
SGST	IGST -> SGST

The bare version of section 49A is as below.

"49A. Notwithstanding anything contained in section 49, the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment."

Example 1

	IGST	CGST	SGST
OUTPUT	1,000.00	1,000.00	1,000.00
INPUT	2,800.00	400.00	400.00

Set Off as per Old Rules

AS PER OLD RULES
OUTPUT LIABILITY	OUTPUT	INPUT SET-OFF			BALANCE
OUTPUT LIABILITY	OUTPUT	IGST	CGST	SGST	BALANCE
IGST	1,000.00	1,000.00	-	-	-
CGST	1,000.00	600.00	400.00		-
SGST	1,000.00	600.00		400.00	-
TOTAL	3,000.00	2,200.00	400.00	400.00	-

Set Off as per New Rules

AS PER NEW RULES
OUTPUT LIABILITY	OUTPUT	INPUT SET-OFF			BALANCE
OUTPUT LIABILITY	OUTPUT	IGST	CGST	SGST	BALANCE
IGST	1,000.00	1,000.00	-	-	-
CGST	1,000.00	1,000.00	-		-
SGST	1,000.00	800.00		200.00	-
TOTAL	3,000.00	2,800.00	-	200.00	-

Example 2

	IGST	CGST	SGST
OUTPUT	1,000.00	1,000.00	1,000.00
INPUT	1,800.00	400.00	400.00

Set Off as per Old Rules

AS PER OLD RULES
OUTPUT LIABILITY	OUTPUT	INPUT SET-OFF			BALANCE TO BE PAID IN CASH
OUTPUT LIABILITY	OUTPUT	IGST	CGST	SGST	BALANCE TO BE PAID IN CASH
IGST	1,000.00	1,000.00	-	-	-
CGST	1,000.00	600.00	400.00		-
SGST	1,000.00	200.00		400.00	400.00
TOTAL	3,000.00	1,800.00	400.00	400.00	-

Set Off as per New Rules

AS PER NEW RULES
OUTPUT LIABILITY	OUTPUT	INPUT SET-OFF			BALANCE TO BE PAID IN CASH
OUTPUT LIABILITY	OUTPUT	IGST	CGST	SGST	BALANCE TO BE PAID IN CASH
IGST	1,000.00	1,000.00	-	-	-
CGST	1,000.00	800.00	200.00	-	-
SGST	1,000.00	-	-	400.00	600.00
TOTAL	3,000.00	1,800.00	200.00	400.00	-

Example 3

	IGST	CGST	SGST
OUTPUT	1,000.00	1,000.00	1,000.00
INPUT	3,800.00	400.00	400.00

Set Off as per Old Rules

AS PER OLD RULES
OUTPUT LIABILITY	OUTPUT	INPUT SET-OFF			BALANCE
OUTPUT LIABILITY	OUTPUT	IGST	CGST	SGST	BALANCE
IGST	1,000.00	1,000.00	-	-	-
CGST	1,000.00	600.00	400.00		-
SGST	1,000.00	600.00		400.00	-
TOTAL	3,000.00	2,200.00	400.00	400.00	-

Set Off as per New Rules

AS PER NEW RULES
OUTPUT LIABILITY	OUTPUT	INPUT SET-OFF			BALANCE
OUTPUT LIABILITY	OUTPUT	IGST	CGST	SGST	BALANCE
IGST	1,000.00	1,000.00	-	-	-
CGST	1,000.00	1,000.00	-	-	-
SGST	1,000.00	1,000.00	-	-	-
TOTAL	3,000.00	3,000.00	-	-	-

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Author:

TaxReply

Feb 5, 2019

Comments

If you have made new ITC set off rules Calculator than Pl mail us very thankful to us

By: Nilesh Gajjar
Feb 6, 2019

IT IS APPLICABLE FOR JANUARY 2019 3B?

By: Parveen Jain
Feb 6, 2019

please mail us new ITC set off rules Calculator i will be very helpfull

By: Ashok Tiwari
Feb 7, 2019

This new ITC set off rules blocking working capital Please discuss

By: Aniruddha Chatterjee
Feb 11, 2019

If output tax of igst is greater than its itc whether we need to set off the cgst and sgst using its own credit or to set off igst first? what to do? Help!

By: Rahul
Feb 12, 2019

Sir, your previous ITC Set off working sheet is very helpful up to 31.01.2019. W.e.f. 01.02.19 we have to follow new rule of ITC Set off. Please share new auto calculator.

By: Vijay Mane
Feb 28, 2019

dear Nilesh GAjjar ji kindly provied Mail id

By: Dinkar
Mar 6, 2019

dear Nilesh GAjjar ji kindly provied Mail id

By: Dinkar
Mar 6, 2019

Thank you for presenting the old GST set off rules and new GST set off rules in an easily understandable manner along with different examples for both.

By: Rajesh Patwardhan
Jul 20, 2020

my question what will be the position if scenarios is opposite. ex.: Output IGst Rs.3000, CGST Rs.1000,SGST Rs.1000. & Input IGST Rs.1000,CGST & SGST Rs.500 each.

Please waiting for your answer.

By: Srabani Banerjee
Mar 22, 2021