TMI BlogImpact of Section 49A On Working Capital limits.X X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sirs, What is the impact of Section 49A on working capital limits? If IGST not available to adjust to output tax of CGST SGST, we will be pay by way of Cash. As per my knowledge up to 31-01-2019 ITC GST adjustment is correct. What is the use to dealers as per new adjustment system of GST? - Reply By Spudarjunan S - The Reply = Dear Sir, The probable reason for insertion of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 49A under GST Act is to utilise the IGST credit in first against the tax liability in order to avoid the complexity to Central Government to apportionate the IGST credits to the states. The impact of Section 49A is accumulation of CGST credit and cash outflow for paying SGST liability. The same is being explained through illustration below:- Electronic credit ledger details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars IGST CGST SGST Output liability 1,00,000 1,00,000 1,00,000 Input Tax Credit 2,00,000 80,000 80,000 Tran credit c/f 50,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Utilisation of Credit for making payment:- (a) Before insertion of section 49A Description Payable ITC Available Paid through ITC Additional Cash Required IGST CGST SGST IGST 1,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,00,000 1,00,000 - - - CGST 1,00,000 1,30,000 - 1,00,00 - - SGST 1,00,000 80,000 20,000 - 80,000 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IGST ITC balance = ₹ 80,000/- (2,00,000 1,00,000 20,000) CGST ITC balance = ₹ 30,000/- (1,30,000 1,00,000) SGST ITC balance = NIL (80,000 80,000) (b) After insertion of Section 49A Description Payable ITC Available Paid through ITC Additional Cash Required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IGST CGST SGST IGST 1,00,000 2,00,000 1,00,000 - - - CGST 1,00,000 1,30,000 1,00,000 - - - SGST 1,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000 80,000 - - 80,000 20,000 IGST ITC balance = NIL (2,00,000 1,00,000 1,00,000) CGST ITC balance = ₹ 1,30,000/- (1,30,000 - NIL) SGST ITC balance = NIL (80,000 80,000) Additional Cash Payable SGST - ₹ 20,000/- - Impact of Section 49A On Working Capital limits. - Query Started ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... By: - TirumalaRao Vuppala Dated:- 28-2-2019 Goods and Services Tax - GST - Got 1 Reply - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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