Utilisation and Restriction of Input Credit under GST
Their will be Four types of input tax under GST:
- Input of Central GST
- Input of State GST
- Input of Integrated GST (for Inter state transaction and imports)
- Input of Union territory (for Union Territories of India)
Credit of above input can be adjusted against GST liability in below manner under subsection 5 of section 49 of CGST Law :
- Integrated tax shall be first use toward Integrated tax payment, remaining can be utlilised for Central Tax and State tax, or as the case may, for Union territory tax in that order.
- The central GST shall be first utilized towards payment of Central GST and balance if any can utilized toward Integrated GST.
- State GST shall credit shall be first utilize toward State GST and balance if any can be utilised for Integrated GST.
- Union territory GST credit will be first used for Union territory GST liability and balance if any can be utilised against Integrated GST.
- The Central GST shall not be utilised toward State GST or Union territory GST, and
- The State GST or Union territory GST shall not be utilized towards Central GST
Sec 49(6) of CGST Law. provides that in case GST dealer fails to utilise credit due to above restriction he can claim for refund as per provision of Section 54