How to Make GST Computation in Case Of GST Credit Adjustment or Setoff

Last updated at April 16, 2024 by

Adjustment of CGST SGST Credit with IGST Payable

Sometimes, we have Credit of CGST and SGST

But there is payable of IGST

In that Cases, Credit of CGST ,SGST Can be adjusted against IGST

 

GST Credit Adjustment Slide 6.jpg

Which will be adjusted first-CGST or SGST?

First CGST Credit will be adjusted with IGST Payable

then SGST Credit will be used

 

Why?

Because  CGST and IGST are of Central Govt

SGST is of State Govt

First Central Govt taxes will be adjusted,than State govt taxes will be adjsuted

GST credit Adjustment Slide 7.jpg

 

 

Adjustment of IGST Credit with CGST SGST Payable

Suppose, it is the Opposite Case

We have Credit of IGST

and GST Payable of CGST ,SGST

GST credit adjustment slide 8.jpg

 

Rule Changed from 1 Feb 2019 if we had IGST Credit

Earlier

Output CGST SGST was first adjusted with Input CGST respectively

Remaining GST payable was adjusted with IGST Credit

Now

Output CGST SGST was first adjusted with IGST Credit

Remaining GST payable was adjusted with Input CGST SGST

 

 

GST credit adjustment slide 9.jpg

 

 

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Transcript

CGST SGST Credit and IGST Payable Adjustment Local Sales 4000 + 200 GST Purchase 5000 + 250 GST Interstate Sales 10000 + 500 GST Purchase 4000 + 200 GST CGST SGST Computation CGST Output Input GST Payable 100 125 Local Sales 10000 + 500 GST Purchase 4000 + 200 GST SGST 100 125 GST Credit 25 25 Less Adjustment 25 25 Balance 0 0 IGST Computation IGST Output Input GST Payable 500 200 300 Less Adjustment 50 Balance 250 First CGST adjusted then SGST IGST Credit Adjusted with CGST SGST payable Local Sales 6000 + 300 GST Purchase 4000 + 200 GST Interstate Sales 8600 + 430 GST Purchase 10000 + 500 GST GST Computation CGST Output Input GST Payable 150 SGST 150 100 50 50 Less Adjustment 50 20 Balance 0 30 GST Computation IGST Output Input 430 500 70 GST Credit Less Adjustment 70 Balance 0 Note IGST gives first to CGST Adjusted then SGST Interstate Sales 4000 + 200 GST Purchase 5000 + 250 GST CGST Output Input 100 125 Local Sales 4600 + 230 GST Purchase 4000 + 200 GST SGST 100 125 GST Credit 25 25 Less Adjustment 25 5 Balance 0 20 IGST Output Input GST Payable 230 200 30 Less Adjustment 30 Balance 0 Sequence of Adjustment of CGST SGST Credit with IGST First CGST adjusted then SGST CHANGE IN RULE OF ADJUSTMENT FROM 1 FEB 2019 Now First take from IGST then reduce own input Earlier first we reduce own input then take from IGST GST Computation Output Input GST Payable 150 100 SGST 150 100 50 50 Less Adjustment 50 20 Balance 0 30 Output Input 430 500 70 GST Credit Less Adjustment 70 Balance 0 CHANGE IN RULE OF ADJUSTMENT FROM 1 FEB 2019 Now First take from IGST then reduce own input Earlier first we reduce own input then take from IGST CGST Output Less Adjustment Balance Output 150 70 SGST 150 0 80 150 Input 100 100 Balance GST Payable 50 Balance GST Credit 20 GST Payable GST Computation GST Computation IGST Output Input 430 500 70 GST Credit Less Adjustment 70 Balance 0 GST Payable

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.