Q.During a month, a trader's Input tax credit available is: Input CGST ₹5,000, Input SGST ₹5,000, Input IGST ₹3,000. The output tax liability for the same month is: Output CGST ₹6,000, Output SGST ₹6,000, Output IGST ₹2,000. Show the set-off and compute the net GST payable in cash.

Each type of input credit is first matched against the output liability of the same type, and any IGST credit left over after covering IGST's own liability can be used to reduce a CGST or SGST shortfall. …

Step 1 — Set off IGST against IGST. Input IGST ₹3,000 is first applied against Output IGST ₹2,000. This fully covers the IGST liability and leaves a surplus IGST credit of 3,000 − 2,000 = ₹1,000.

Step 2 — Set off CGST against CGST. Input CGST ₹5,000 is applied against Output CGST ₹6,000. This leaves a CGST shortfall of 6,000 − 5,000 = ₹1,000.

Step 3 — Set off SGST against SGST. Input SGST ₹5,000 is applied against Output SGST ₹6,000. This leaves an SGST shortfall of 6,000 − 5,000 = ₹1,000.

Step 4 — Use the surplus IGST credit. The ₹1,000 IGST credit left over from Step 1, having already cleared its own liability, is used to make up the CGST shortfall of ₹1,000, reducing it to nil.

Step 5 — Compute the final cash payment. After Steps 1–4: IGST liability = nil, CGST liability = nil, SGST liability = ₹1,000 (no credit remains to cover it). This ₹1,000 must be paid in cash. …

Set off each credit against its own head first, then apply any leftover IGST credit against a CGST/SGST shortfall; cross-check the fina …

A frequent error is netting all credits and all liabilities into one pool and simply subtracting totals, ignoring that CGST credit cannot be used against SGST liability (and vice versa) — only IGST credit can bridge across heads. Another is forgetting to f …