Under the old rules which were in operation in February and March, in most of the cases, IGST credit used to get exhausted in IGST and CGST payments in order. CGST credit used to stay in the system un-utilised, and businesses had to make cash payments for SGST.
Now, under the modified rules, the taxpayer can choose to pay off SGST using IGST credit, even if the latter is not used to set off CGST liability. This will improve the efficiency of credit utilisation in the GST system, while helping the concerned company with marginally increased working capital.
However, some businessmen said that the rules effective in February and March were not implemented in reality, since the GST Network (GSTN) system did not allow for the same. But nevertheless, this change makes it better for businesses, they said.
2019-03-31