Section 10 of UTGST Act 2017: Transfer of Input Tax Credit (ITC)

Provisions under Section 10 of the Union Territory Goods and Services Tax (UTGST) Act, 2017 relating to “Transfer of Input Tax Credit (ITC)”, are as under:

Section 10 of UTGST Act 2017: Transfer of Input Tax Credit (CHAPTER IV – PAYMENT OF TAX)

On utilisation of input tax credit of Union territory tax for payment of tax dues under the Integrated Goods and Services Tax Act in accordance with the provisions of sub-section (5) of section 49 of the Central Goods and Services Tax Act, as reflected in the valid return furnished under sub-section (1) of section 39 of the Central Goods and Services Tax Act, the amount collected as Union territory tax shall stand reduced by an amount equal to such credit so utilised and the Central Government shall transfer an amount equal to the amount so reduced from the Union territory tax account to the integrated tax account in such manner and within such time as may be prescribed.

Amendments History:

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Commentary on Section 10 of UTGST Act, 2017

Section 10 of the Union Territory Goods and Services Tax (UTGST) Act, 2017, deals with the “Transfer of Input Tax Credit (ITC).” This section outlines how input tax credit (ITC) of Union territory tax can be utilized for the payment of tax dues under the Integrated Goods and Services Tax (IGST) Act. This process must be carried out following the provisions of sub-section (5) of section 49 of the Central Goods and Services Tax (CGST) Act.

In simpler terms, this provision allows a taxpayer to use the input tax credit (ITC) of Union territory tax to pay off their tax liabilities under the Integrated Goods and Services Tax (IGST) Act. This is only valid if the taxpayer has furnished a valid return under sub-section (1) of section 39 of the CGST Act.

When a taxpayer utilizes the input tax credit (ITC) of Union territory tax to pay their IGST dues, the amount collected as Union territory tax will be reduced by the same amount of credit utilized. The Central Government will then transfer an amount equal to the reduced amount from the Union territory tax account to the integrated tax account. The manner and timeframe for this transfer will be prescribed by the government.

In essence, Section 10 of the UTGST Act, 2017, facilitates the transfer of input tax credit (ITC) of Union territory tax to be used for settling tax dues under the IGST Act, ensuring seamless movement of credit and promoting a smooth tax structure.

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Note: The UTGST Act 2017 has been notified vide GOI Notification dated 12/04/2017, which has subsequently been amended  through UTGST (Amendment) Act 2018, Finance Act 2019, Finance Act 2020, Finance Act 2021, Finance Act, 2022 and Finance Act, 2023 including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective UTGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of the Amendments made by various Notifications issued by CBIC from time to time, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.