The tax credits of central tax, integrated tax and state tax can be used to set-off the liability of central tax, state tax/UT tax and integrated tax in the order specified under GST.
The order in which tax credit can be offset is given below:
Input Tax Credit |
Set-off against the Liability |
Central tax |
Central tax and integrated tax (in that order). |
Integrated tax |
Integrated tax, central tax, state tax/UT tax (in that order). |
State tax/UT tax |
State tax/UT tax and integrated tax (in that order). |
To record a journal voucher for cross utilisation of tax credits
1. Go to Gateway of Tally > Accounting Vouchers > F7: Journal.
Note: You can also create a journal voucher from Gateway of Tally > Display > Statutory Reports > GST > GSTR-1 or GSTR-2.
2. Click J: Stat Adjustment.
3. In the Stat Adjustment Details screen, select the options as shown below:
4. Press Enter to save and return to the journal voucher.
5. In the journal voucher, debit and credit the ledgers as per the scenarios mentioned below:
Scenario |
Debit Ledger |
Credit Ledger |
Utilisation of central tax credit, when only central tax credit is available. |
● Debit the central tax ledger ● Enter the amount to the extent of credit available. |
Credit the central tax ledger to set-off the payable amount against the available credit. |
Utilisation of central tax credit, when central tax and integrated tax credits are available. |
● Debit the central tax ledger. ● Enter the amount to the extent of credit available. |
● Credit the central tax ledger, and enter the total amount payable. ● Credit the integrated tax ledger if the tax credit remains after it is set-off against central tax dues. |
Utilisation of state tax credit, when only state tax credit is available. |
● Debit the state tax ledger. ● Enter the amount to the extent of credit available. |
Credit the state tax ledger to set-off the payable amount against the available credit. |
Utilisation of state tax credit, when state tax and integrated tax credits are available. |
● Debit the state tax ledger. ● Enter the amount to the extent of credit available. |
● Credit the state tax ledger, and enter the total amount payable. ● Credit the integrated tax ledger if the tax credit remains after it is set-off against state tax dues. |
Utilisation of integrated tax credit, when only integrated tax credit is available. |
● Debit the integrated tax ledger. ● Enter the amount to the extent of credit available. |
Credit the integrated tax ledger to set-off the payable amount against the available credit. |
Utilisation of integrated tax credit, when integrated tax and central tax credits are available. |
● Debit the integrated tax ledger. ● Enter the amount to the extent of credit available. |
● Credit the integrated tax ledger, and enter the total amount payable. ● Credit the central tax ledger, if the tax credit remains after it is set-off against integrated tax dues. |
Utilisation of integrated tax credit, when integrated tax, central tax and state tax/UT tax credits are available. |
● Debit the integrated tax ledger. ● Enter the amount to the extent of credit available. |
● Credit the integrated tax ledger, and enter the total amount payable. ● Credit the central tax ledger, if the tax credit remains after it is set-off against integrated tax dues. ● Credit the state tax ledger, if the tax credit remains after it is set-off against central tax dues. |
Utilisation of cess credit, when only cess credit is available. |
● Debit the cess ledger. ● Enter the amount to the extent of credit available. |
Credit the cess ledger to set-off the payable amount against the available credit. |
'Recording Journal Vouchers for Adjustments Against Tax Credit under GST' has been shared with