Section 9 of UTGST Act 2017: Payment of Tax

Provisions under Section 9 of the Union Territory Goods and Services Tax (UTGST) Act, 2017 relating to “Payment of Tax”, are as under:

Section 9 of UTGST Act 2017: Payment of Tax (CHAPTER IV – PAYMENT OF TAX)

The amount of input tax credit available in the electronic credit ledger of the registered person on account of,-

(a) 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 as the case may be, Union territory tax, in that order;

(b) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax:

Provided that the input tax credit on account of Union territory tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax. [Refer Note 1]

(c) the Union territory tax shall not be utilised towards payment of central tax.

Amendments History:

1. Proviso to clause (b) inserted vide the UTGST (Amendment) Act, 2018 (GOI Notification dated 30/08/2018, followed with CBIC Notification 1/2019 dated 29/01/2019 on commencement date of 01/02/2019.

Commentary on Section 9 of UTGST Act, 2017

Section 9 of the Union Territory Goods and Services Tax (UTGST) Act, 2017 deals with the payment of tax and outlines the manner in which input tax credit (ITC) can be utilized. Input tax credit refers to the credit that businesses can claim on the taxes paid on the inputs used for manufacturing goods or providing services. The section can be explained through the following provisions:

Section 9(a) of UTGST Act, 2017

Integrated tax (IGST) input tax credit utilization shall be made in the follwoing order:

i) The ITC available on account of integrated tax (IGST) should be first utilized for the payment of IGST.

ii) If there is any remaining balance after paying IGST, it can be used for the payment of central tax (CGST) and state tax (SGST) or Union territory tax (UTGST).

Section 9(b) of UTGST Act, 2017

Union territory tax (UTGST) input tax credit utilization shall be made in the following order:

i) The ITC available on account of UTGST should be first utilized for the payment of UTGST.

ii) If there is any remaining balance after paying UTGST, it can be used for the payment of integrated tax (IGST).

However, there is a proviso which states that UTGST ITC can only be utilized for the payment of IGST if there is no available balance of CGST ITC for the payment of IGST.

Section 9(c) of UTGST Act, 2017

The ITC available on account of UTGST cannot be used for the payment of central tax (CGST), i.e. UTGST input tax credit utilization is restricted by this clause.

In summary, Section 9 of the UTGST Act, 2017 outlines the order in which input tax credit can be utilized for various tax payments. It ensures that the utilization of ITC is done in an orderly manner and that certain restrictions are in place for the appropriate use of input tax credits.

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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.