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2017 (10) TMI 253 - HC - GSTUtilisation 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 - Held that - 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 - some time sought for obtaining instructions.
Issues:
Utilization of CGST credit and SGST credit for payment of integrated tax under Section 49 (5) of the CGST Act. Analysis: The judgment concerns the utilization of CGST and SGST credits for the payment of integrated tax as per Section 49 (5) of the Central Goods and Services Tax Act, 2017. The petitioner faced an issue when attempting to make a partial payment of integrated tax using both credits, but encountered a pop-up error message on the GST portal instructing to "Offset the CGST Credit completely before cross-utilization of SGST Credit against IGST tax liability." The petitioner argued that this error message was not based on any rule prescribed under Section 49 (4) of the CGST Act and only appeared after entering figures, not on the initial form available on the portal. Reference was made to Rule 86 (2) of the CGST Rules, emphasizing that the electronic credit ledger should be debited in accordance with the provisions of Section 49. Additionally, it was highlighted that the Common Goods and Services Tax Electronic Portal's mandate, as per Section 146 of the CGST Act, is to facilitate various tax-related activities, and the system should not deny the utilization of CGST and SGST credits in a manner not specified under the Act or its rules. The counsel for the GNCTD requested time to obtain instructions on the matter, indicating a willingness to address the issue raised by the petitioner. The court allowed the application, subject to all just exceptions, and issued a notice to the GNCTD through its standing counsel. The judgment reflects a detailed analysis of the legal provisions governing the utilization of CGST and SGST credits for the payment of integrated tax, emphasizing the importance of adherence to the statutory framework and rules while utilizing electronic credit ledgers on the GST portal.
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