GST ITC calculator with the correct cascade

Section 49 of CGST Act read with Rule 88A mandates: IGST credit must offset IGST liability first, then can offset CGST or SGST in any order. CGST credit can only offset CGST then IGST — NEVER SGST. SGST credit can only offset SGST then IGST — NEVER CGST. CGST and SGST credits are NOT cross-utilizable due to constitutional split between Centre and State. Most online calculators get this wrong; ours follows the Act precisely.

NO. This is the most common mistake. CGST credit flows: CGST → IGST. SGST credit flows: SGST → IGST. They cannot cross. The reason is constitutional: CGST is collected by the Centre (Consolidated Fund of India), SGST by the State (State's account). Cross-utilizing would mean the Centre paying State revenue or vice versa — impermissible. IGST credit is the only fully fungible credit (because IGST is collected by Centre and split with destination state).

Section 17(5) blocks ITC on specified categories regardless of business use: motor vehicles (with exceptions for transport business), food/beverages/outdoor catering, beauty treatment, health services, club memberships, life/health insurance, employee travel benefits (LTA), works contract for immovable property (except plant & machinery), goods for personal consumption, and goods lost/stolen/destroyed/written-off. Even if you have a valid tax invoice, ITC must be reversed in Table 4(B) of GSTR-3B.

ITC reversal means giving back credit you initially claimed but became ineligible for. Common triggers: payment to supplier not made within 180 days from invoice date (Rule 37); inputs used for exempt supplies (Rule 42 monthly, Rule 43 over 60 months for capital goods); blocked credits under Section 17(5); credit notes issued by supplier reducing the original invoice value. Reversal is reported in Table 4(B) of GSTR-3B and effectively increases your net cash GST payable for that month.

Yes, in one shot in the month of receipt — capital goods ITC is no longer spread over 5 years (the old central excise rule). Important catch: if you claim depreciation under Income-tax Act on the GST component of the asset's cost, you cannot also claim ITC. Pick one. Most businesses claim ITC because it's immediate cash flow benefit vs depreciation spread over the asset's useful life. "Capital goods" includes plant, machinery, computers, furniture used for business.

Rule 88A (effective Feb 2019, amended July 2019) clarifies the ITC utilization order — IGST credit must be exhausted first against IGST liability, then can be split across CGST/SGST in any order. Rule 88B (effective July 2022) handles interest computation on delayed payments — interest is on net cash liability AFTER ITC offset, not on gross output tax. These rules removed earlier ambiguity from the original Section 49(5) and made automated GSTN computation possible.

Yes — unutilized ITC at the end of a tax period is carried forward to subsequent periods indefinitely in your electronic credit ledger. Exception cases get refund: ITC on exports / zero-rated supplies (Section 54, claim within 2 years); accumulated credit due to inverted duty structure (input GST rate > output GST rate, refund allowed for specified categories per notification). Otherwise the credit just sits in your ledger waiting to be used. Lapsing of credit happens only on cancellation of registration or change of constitution.

Section 16(4) limits ITC claim to the earlier of: (a) due date of furnishing GSTR-3B for September of the next financial year, or (b) furnishing of annual return (GSTR-9) for that financial year. So a March 2025 invoice can be claimed at the latest in October 2025 GSTR-3B (filed by 20-Nov-2025). Miss the window and the credit is permanently lost. Reconcile monthly — don't wait for year-end.