GST Portal Update: Flexible ITC Utilisation

Flexible ITC Utilisation for IGST

Effective February 2026

The GST portal has introduced a highly anticipated functionality allowing taxpayers to utilize CGST or SGST credit in any order to pay IGST liability after exhausting IGST credit.

Key Benefits

Improved Cash Flow: Significantly reduce unnecessary cash payments and avoid blocked credits.
Enhanced Flexibility: Total freedom to use CGST or SGST ITC in any order for IGST liabilities.
Simplified Compliance: Better control over credit utilization summaries with a reduced administrative burden.

How It Works

  1. Step 1: Fully exhaust your available IGST ITC to pay off IGST liability.
  2. Step 2: Choose between CGST or SGST ITC in any order or proportion to pay the remaining IGST balance.
Important: This update applies to all GSTR-3B filers. While it changes the utilization sequence, it does not alter the underlying eligibility rules of Input Tax Credit. Always verify your utilization summary before final submission.
Applicable from the February 2026 Tax Period onwards.