Offsetting the ITC Against the Liability

To offset the liability with the available ITC:

1. From the GST Module, click GST System Setup (G75IGST4H), and then GST Credit Distribution Setup.

   The system launches the Work With GST Credit Distribution form that displays the opening and closing balances for CGST, IGST, SGST, and CESS in the Input Tax Credit ledger, Tax Liability ledger, and Cash Ledger for each GST unit, period, and year combination.

2. On the Work With GST Credit Distribution form, select the record of the GST unit, period, and year for which you want to offset and distribute the ITC amounts. Then, click Select.

   The system offsets the available ITC amounts against the liability amounts based on the effective offset rule in the F75I830 table and displays the updated amounts in the GST Credit Distribution form.

3. On the GST Credit Distribution form, review the following:

   • ITC amounts

   • Liability amounts

   • ITC amounts that are utilized to offset the liability

   • Balance liability amounts and the balance ITC amounts

   • Payment amounts that you must pay to the government so that the balance liability is zero (0). This is the amount for which the system creates vouchers.

     Initially, the Payment fields are populated with the balance GST amounts that you must pay to the government, and the Balance Liability fields have a value of zero (0) for all the tax types. When you reduce the payment amount, the balance liability increases for that tax type. You can make a payment less than or equal to the default payment amount that the system populates after applying the offset rules. For example, if CGST payment amount is 1,000 INR, then you can make a payment of 1,000 INR or less and not more than that.

4. To clear the updates you made and to reset the values that the system has calculated using the effective offset rule, click Reset.