Paying Tax

Order of utilization of input tax credit

Rule 88A of the CGST Rules

Chapter 9 – Payment of Tax Text as on 2026-09-05 Source CBIC

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IGST credit must be exhausted first – towards IGST, then in any order towards CGST and SGST or UTGST – and only then may CGST or SGST credit be used. This is the utilisation sequence that decides how much cash you end up paying.

The exact words of the law

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Reproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.

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1 [Rule 88A. Order of utilization of input tax credit.- Input tax credit on account of integrated tax shall first be utilised towards payment of integrated tax, and the amount remaining, if any, may be utilised towards the payment of central tax and State tax or Union territory tax, as the case may be, in any order: Provided that the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State 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 fully.] 1 . Inserted vide Notification No. 16/2019-CT dated 29.03.2019.

Where this comes from

Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.

rule 88Aorder of utilization of input tax credit

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