As per section 49 (5) of the CGST Act, 2017, IGST shall first be utilised towards payment of IGST and the amount remaining, if any, may be utilised towards the payment of CGST and SGST/UTGST, in that order.

As per section 49 (5) of the CGST Act, 2017, IGST shall first be utilised towards payment of IGST and the amount remaining, if any, may be utilised towards the payment of CGST and SGST/UTGST, in that order.

Goods & Services Tax
A & M DESIGN & PRINT PRODUCTION vs. UNION OF INDIA & ORS.-(GST HC Cases)

Input Tax Credit—Assessee tried to make payment of IGST liability from electronic credit ledger using CGST and SGST credit—However, portal threw up an error directing assessee to first utilize CGST credit—Hence, present petition on grounds that no such information is given in section 49 of CGST Act, 2017—Further it was alleged that system could not be coded in such a manner so as to deny utilization of CGST and SGST credit especially when it was not provided in section 49 (5) of CGST Act, 2017 or relevant CGST Rules, 2017—As respondent requested time for obtaining instructions, matter was listed on another date—Appeal Dismissed.

1. Allowed, subject to all just exceptions.


2. Notice. Mr. Ramesh Singh, learned Standing Counsel, accepts notice on behalf of GNCTD.


3. The issue raised in the present petition concerns the utilisation of CGST credit and SGST credit for payment of integrated tax in terms of Section 49 (5) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’). The Petitioner states that its attempt to make payment of the integrated tax partially from the CGST credit and partially from the SGST credit was frustrated when the Electronic Credit Ledger available at the Portal www.gst.gov.in showed a pop-up error message which stated: “Offset the CGST Credit completely before cross utilization [of] SGST Credit against IGST tax liability.”


4. Mr. Puneet Agarwal, learned counsel for the Petitioner, points out that this pop-up error is appearing only on the system and there is no such rule prescribed in terms of Section 49 (4) of the CGST Act. He also states that it does not appear on the form which is available on the Portal. It appears only after the figures are entered. A reference is made to Rule 86 (2) of the CGST Rules which states that `the electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the provisions of Section 49.’ It is also pointed out that under Section 146 of the CGST Act, the mandate of the Common Goods and Services Tax Electronic Portal is to facilitate the registration, payment of tax, furnishing of its returns, etc. It is also submitted that the system cannot be programmed so as to deny the utilization of CGST and SGST credit in a manner not envisaged either under Section 49 (5) of the Act or the Rules made under Section 49 (4) of the Act.



5. Mr. Ramesh Singh, learned Counsel appearing for GNCTD, states that some time may be granted for obtaining instructions.


6. List on 26th September 2017.

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