Shubham R K and Associates

Many taxpayers are repeatedly asking us one question these days- what should be done about the IGST set-off done during February 2026?

Briefly, a GSTN advisory issued on 30 January 2026 led to a change in portal behaviour, allowing IGST liability to be set off using CGST and SGST credit in any order after exhausting IGST credit. This functionality was available for a short period and was subsequently rolled back by March 2026, with the system reverting to the sequence prescribed under provisions of the CGST Act.

Post rollback, the position is clear. The utilisation of ITC must strictly follow provisions. There is no flexibility to choose the order between CGST and SGST for payment of IGST liability.

For February 2026, where taxpayers have followed the portal enabled utilisation, a practical view is required. In our professional opinion, immediate reversal may not be necessary in all cases, particularly where the adjustment is revenue neutral. Strong arguments exist. The utilisation was system-driven, backed by an official advisory, and there was no option to alter the sequence.

As always, the final approach should be guided by materiality and risk appetite, with proper documentation in place.

Notification for extension of date of filing of GSTR 3B for the month of March 2026.

Delay in Tax Audit may now attract a fixed fee.

Timely compliance becomes even more important!