Section 49A

Section 49A. Utilisation of input tax credit subject to certain conditions

Date Issued: 1 February 2019
State: CBIC
Source: CGST Act 2017
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Summary

Section 49A of the CGST Act is a strict rule that overrides the standard payment procedures to enforce a specific sequence for utilizing Input Tax Credit (ITC). It mandates that a taxpayer must fully drain their Integrated Goods and Services Tax (IGST) credit balance first. Only after the IGST credit is completely exhausted can the taxpayer begin to use their Central Tax (CGST) or State/Union Territory Tax (SGST/UTGST) credits to pay off their remaining tax liabilities. This entire provision was introduced via an amendment in 2018 and officially came into effect on February 1, 2019.