Understanding the GST Credit Offset Process

As a manufacturer or provider of goods and services, you receive credit for paying input tax when you procure goods and services to run your business. You are liable to pay output tax on the sales done in your business. You can offset the output tax against the input tax that you have paid.

You can utilize the input tax credit (ITC) for one GST type to recover the tax liability (output tax) for another GST type. However, you must follow the order of priority prescribed by the government to offset the ITC against the tax liability of other GST types. For example:

Input Tax Credit	Utilize for Liability Payment (in the order listed below)
IGST	1. IGST 2. CGST 3. SGST
CGST	1. CGST 2. IGST
SGST	1. SGST 2. IGST

In the JD Edwards EnterpriseOne system, you complete these tasks to offset the ITC against the liability amounts:

1. Set up GST offset rules along with the priority order.

2. Specify the GST unit, period, and year for which you want to adjust the tax liability with the ITC.