Provision of ISD as per Act and Rules

[CASUNIL BHANSALI]

Section 20 provides that credit of integrated tax be distributed as 'integrated tax or central tax'. However, rule 39 of CGST Rules provides that 'input tax credit on account of integrated tax shall be distributed as input tax credit of integrated tax to every recipient.'.
Discripency in provision of Act and Rule

AI Summary

Conflicting Guidance on Integrated Tax Credit: Section 20 vs. Rule 39 in CGST Framework. Practical Compliance Suggested to Avoid Litigation. A discussion on the discrepancy between Section 20 of the CGST Act and Rule 39 of the CGST Rules regarding the distribution of integrated tax credit. Section 20 allows distribution as either integrated or central tax, while Rule 39 mandates distribution as integrated tax. One participant suggests following Rule 39 to avoid litigation, as integrated tax credit can be used for any tax type. Another participant advises distributing only as IGST. The discussion highlights the potential conflict but suggests practical compliance to prevent unnecessary legal issues.