Can IGST liability be set off against ITC of CGST and SGST?

[gvenugopal g]

Dear Experts,

We are GST registered manufacturing establishment based in Tamilnadu. We wish to open a branch in some other state and get GSTN, to procure some raw materials locally and store there and send the same to HO as per required quantities.

The branch purchase the raw materials locally and pay SGST and CGST. Whenever they transfer the materials to HO they raise Tax Invoice and charge IGST.

Kindly let us know the above IGST liability can be set off against ITC of CGST and SGST?

Thanks & Regards: G. VENUGOPAL

AI Summary

Manufacturing firm clarified on IGST liability set-off using ITC of CGST and SGST under Rule 88A, CGST Rules. A manufacturing company in Tamilnadu, registered under GST, inquired about setting off IGST liability against the input tax credit (ITC) of CGST and SGST when transferring materials to their head office. An expert responded, referencing Notification No.16/2019-CT, which introduced Rule 88A in the CGST Rules. This rule mandates that ITC from integrated tax (IGST) must first be used to pay IGST, and any remaining credit can be applied to central and state taxes. The order of utilization is fixed and cannot be altered. The inquirer expressed gratitude for the clarification.