Section 9A of The Union Territory Goods and Services Tax Act, 2017
1[9A. Utilisation of input tax credit.--- Notwithstanding anything contained in section 9, the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised towards such payment.]
Summary
- This rule creates a strict sequence for using tax credits, overriding the general rules in Section 9.
- A business must completely drain its integrated tax credit account first before touching its Union territory tax credits.
- Only after the integrated tax credits are entirely used up can the business start using its Union territory credits to pay either integrated or Union territory tax bills.
Practical examples
FAQ
1. Can I choose to keep my integrated tax credits for later and use my Union territory credits now?
No, you are legally required to use up all your available integrated tax credits first before you can use any Union territory credits.
2. Does this rule change what I learned in Section 9?
Yes, this rule applies regardless of what Section 9 says, acting as an override to ensure integrated credits are always depleted first.
3. Does this rule affect how I pay central taxes?
This specific rule focuses on the order for paying integrated and Union territory taxes using those specific credits.
Test yourself
Q1.Under Section 9A of The Union Territory Goods and Services Tax Act, 2017, what must happen before a business can use its Union territory tax credits to pay a Union territory tax bill?
Q2.Under Section 9A of The Union Territory Goods and Services Tax Act, 2017, how does this provision relate to the rules laid out in Section 9 regarding the payment of tax?
Q3.Under Section 9A of The Union Territory Goods and Services Tax Act, 2017, what specific types of tax payments does this mandatory order of using integrated credits first apply to?
Q4.Under Section 9A of The Union Territory Goods and Services Tax Act, 2017, if a taxpayer has zero integrated tax credit available in their ledger, what does this rule require them to do next?