Assam Government gives Clarification in respect of utilization of input tax credit under GST

Apr 26, 2019 | by Avantis RegTech Legal Research Team


The State Government of Assam on April 24, 2019, has clarified the issues regarding utilization of input tax credit under GST.

Various representations have been received from the trade and industry regarding challenges being faced by taxpayers due to bringing into force of section 49A of the Assam Goods and Services Tax Act, 2017. In order to ensure uniformity in the implementation of the provisions of the law, State Government of Assam clarifies the issues, namely:

The newly inserted Section 49A of the Assam Goods and Services Tax Act, 2017, provides that the input tax credit of integrated tax has to be utilized completely before input tax credit of Central tax or State tax can be utilized for discharge of any tax liability. Further, as per the provisions of section 49, credit of integrated tax has to be utilized first for payment of integrated tax, then Central tax and then State tax in that order mandatorily. This led to a situation, in certain cases, where a taxpayer has to discharge his tax liability on account of one type of tax (State tax) through electronic cash ledger, while the input tax credit on account of other type of tax (Central tax) remains un-utilized in electronic credit ledger.

The newly inserted rule 88A in the Assam Goods and Services Tax Rules, 2017, allows utilization of input tax credit of Integrated tax towards the payment of Central tax and State tax, or as the case may be, Union territory tax, in any order subject to the condition that the entire input tax credit on account of Integrated tax is completely exhausted first before the input tax credit on account of Central tax or State / Union territory tax can be utilized. It is clarified that after the insertion of the said rule, the order of utilization of input tax credit will be as per the order given in the Notification (page 2).

Therefore, till the new order of utilization as per newly inserted Rule 88A of the Assam Goods and Services Tax Rules, 2017 is implemented on the common portal, taxpayers may continue to utilize their input tax credit as per the functionality available on the common portal.

[Circular No. 52/2019-GST]

Click here to download the Circular.


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