Central Clearing Agency to adjust IGST credit:-
As per IGST Act, CGST Act, UTGST Act and SGST Act, the input tax credit of IGST paid on inter-state transactions is expected to be available for subsequent supply of goods and services in following sequence –
(a) IGST
(b) CST
(c) SGST/UTGST (if balance left).
If IGST is utilized for payment of SGST/UTGST, the amount will be credited to that State Government/Union Territory, as the State Government/Union Territory will get less revenue to that extent.
Input tax credit of IGST, CGST, UTGST and SGST can be utilised (in that sequence) for payment of IGST.
If SGST/UTGST is utilized for payment of IGST, the corresponding amount will be debited to the concerned State Government/Union Territory. The reason is that actual IGST paid to Union Government will be less to that extent.
The debit and credit transactions will be carried out with help of dedicated national computer based network by Central Clearing Agency.