GST Credit Mechanism : How Different GST Credit will be Setoff

Credit mechanism under GST seems to be a complex.

Here we will explain how the credit will be utilized on GST EXPLAINED.

• Input credit of CGST, SGST, IGST, UTGST would be available to the taxpayer for set off from his output liability.
• Utilization of one state SGST and UTGST in setting of another state SGST and UTGST would not be allowed.

Learn more about GST from GST Ready Reckoner.

• The input would be first required to be setoff against its own output liability and then to further liabilities. Eg. Output CGST should be first setoff from Input CGST ( of same state ) and then IGST.

The utilization can be very well be explained through the following diagrams. 

Please note that Input should be utilized as given in order (left to right):

For IGST Liability:

 For UTGST Liability:

 For CGST Liability:

 For SGST Liability:

To learn more, stay tuned at GST EXPLAINED. Subscribe to GST EXPLAINED through our home page