GST portal flip-flop on ITC use sparks confusion, MP tax bar seeks clarity
Indore: Changes in the GST portal's rules for using input tax credit (ITC) to pay integrated GST (IGST) dues have created confusion among taxpayers, prompting the Madhya Pradesh Tax Law Bar Association to seek clarity from the state tax department.
In a memorandum submitted to the commercial tax and state GST department, the association said frequent changes in GSTN advisories and corresponding portal updates have led to uncertainty in return filings.
The CGST Act prescribes a clear order for utilisation of ITC while offsetting IGST liability, giving priority to CGST credit over SGST. However, a GSTN advisory issued on January 30, 2026 allowed taxpayers to use CGST and SGST ITC against IGST liability in any order.
The portal was aligned with this advisory for February return filings. However, for March returns, the system reverted to the earlier statutory sequence, and the advisory was edited, leaving taxpayers uncertain about the validity of returns already filed.
The association has urged authorities to treat ITC utilisation for February 2026 as valid and to implement any changes prospectively.
It has also sought protection for taxpayers from any demand, interest, or penalties arising due to the issue and called for a clear circular to ensure consistency and avoid future disputes.
