Section 49B

Section 49B. Order of utilisation of input tax credit

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

Section 49B of the CGST Act is an enabling provision that gives the Government the legal authority to define the exact sequence businesses must follow when using their Input Tax Credits (ITC) to pay off their tax liabilities. While it gives the GST Council flexibility to tweak how IGST, CGST, and SGST credits are applied against each other, it strictly protects the foundational rule that Central and State taxes cannot be cross-utilized against each other. This entire section was inserted into the law via a 2018 amendment and became effective on February 1, 2019, paving the way for the government to introduce more specific ledger rules (such as Rule 88A).