Sign In

Browse By

Dilemma over ITC adjustment for Feb Month

Dilemma over ITC adjustment for Feb Month :

Dilemma over ITC adjustment for Feb month is persisting. CGST amendment Act is applicable form 1st Feb 2019. Section 49A of the said section covers the manned of utilisation of ITC. As per newly inserted Section 49A, ITC on account of CGST and SGST can be utilised towards payment of CGST, SGST and IGST as the case may be only after ITC available on account of IGST has been fully exhausted towards payment of such taxes. This provision was in discussion due to its bad impact. It is supposed to have some bad impact on the working capital of entities. It means that IGST has to be fully exhausted first and thereafter ITC of other taxes such as CGST and SGST can be utilised for payment of taxes under respective head
The Section 49A is applicable from 1 February 2019, however, presently the GSTN portal is not permitting payment in the revised manner and payment is allowed in terms of the provisions as applicable prior to 1 Feb 2019 (i.e. old manner in terms of Section 49 of CGST Act). This has created lot of confusion in the trade and industry as relevant Notifications mentioned below as well do not refer to Section 49A. Taxpayer is totally confused what to do. Also the portal is not even allowing to make the changes as per section 49A and file the return. It is a demand to remove this difficulty and clarify the situation. 

Notification No. 34/2018 – Central Tax, dated 10 August 2018

is issued with regards to due dates for filing of GSTR – 3B return for the each of the period from July 2018 to March 2019 and payment of taxes for the respective periods provides for such payment of taxes in accordance with provisions of Section 49. The said Notification is not amended so as to align with provisions of newly inserted Section 49A


Notification No. 13/2019 – Central Tax, dated 7 March 2019

 is issued for the subsequent period from April 2019 to June 2019. The said Notification also provides that payment of taxes for discharge of tax liability as per FORM GSTR-3B should be made in accordance with Section 49 and does not refer to Section 49A even when such Notification is issued after Section 49A is made effective. But as per section 49A inserted via CST amendment Act is over riding section 49. It starts like” nothwithstanding anything contained in section 49. It supersede section 49. Now the dilemma is again there. What to follow and how. It is also important that  last date for filing of GSTR 3b is 20th of March. Which is also a festive day due to Holi.
*Accordingly, till such time matter is properly clarified by CBIC and GSTN return utility is modified to permit manner of payment as specified in the amended Section 49A, it is suggested that payments of the respective taxes are made as per Section 49 i.e. old manner*
However, a query raised with GST helpdesk in this regard received following response for ITC adjustment for feb month:
*“Resolution: This is in reference to your concern regarding new offset functionality in GSTR-3B. We would like to inform you that currently new offset functionality is not available on GST Portal. So, we request you to wait for the same and keep yourself updated with”*
 It is better to hold the return or do it in new way. 

Stay informed...

Recieve the most important tips and updates

Absolutely Free! Unsubscribe anytime.

We adhere 100% to the no-spam policy.

Profile photo of CA shafaly girdharwal CA shafaly girdharwal


New Delhi, India

CA Shaifaly Girdharwal is a GST consultant, Author, Trainer and a famous You tuber. She has taken many seminars on various topics of GST. She is Partner at Ashu Dalmia & Associates and heading the Indirect Tax department. She has authored a book on GST published by Taxmann.

See Profile
Opinions & information presented by ConsultEase Members are their own.