GST set off calculator and ITC set off rules

The order of ITC set off under GST

The order comes from section 49(5) and section 49A of the CGST Act and rule 88A of the CGST Rules. Section 49A and rule 88A came in from early 2019, and CBIC explained them in Circular 98/17/2019 (23 April 2019).

In short:

• IGST credit goes first, and in full. Section 49A says CGST and SGST credit can be used “only after the input tax credit available on account of integrated tax has first been utilised fully”.
• IGST credit can be split between CGST and SGST. Rule 88A says the remaining IGST credit can pay central tax and State tax “in any order”. CBIC's circular adds “in any proportion”.
• CGST and SGST credit pay their own tax first. Only what is left over can pay IGST.
• For IGST, CGST credit comes before SGST credit. The law says SGST credit can pay IGST “only where the balance of the input tax credit on account of central tax is not available”.
• CGST and SGST never cross. CGST credit cannot pay SGST, and SGST credit cannot pay CGST.

The GST portal's own help page (“Utilization Principles”) gives the same order.

New GST set off rules in 2026: what changed and what did not

Many pages now talk about “new GST set off rules 2026”. Here is what we found.

• The law has not changed. Section 49, section 49A and rule 88A read the same as in 2019. The GST changes in the Finance Bill 2026 that we checked do not touch them.
• The GST portal said it would allow more choice. On 30 January 2026, GSTN (which runs the GST portal) published an advisory on GSTR-3B. Point 3 said that, once your IGST credit is used up, the portal would let you pay IGST with CGST and SGST credit “in any sequence”. An update on 19 February 2026 said this would start from the February 2026 tax period.
• Reports since then do not match. In February 2026, a tax news site reported that the portal still made people use CGST credit before SGST credit for IGST. In April 2026, a tax firm reported that point 3 had been taken out of the advisory on the portal, with no official note.
• What we follow. The law still says SGST credit can pay IGST only when no CGST credit is left. So this calculator uses CGST credit first. As of 19 October 2026 we found no official GSTN or CBIC statement that settles it. If the portal shows you a different order, ask your tax adviser before you file.

The same January 2026 advisory also changed how the portal works out interest on a late GSTR-3B. That part is explained in our GST interest calculator.

Which credit can pay which tax?

• Can IGST be adjusted against SGST? Yes. IGST credit left after paying IGST can pay SGST, and CGST, in any order.
• Can SGST be adjusted against IGST? Yes, but only the SGST credit left after paying SGST, and only once the CGST credit is used up.
• Can CGST be adjusted against SGST, or SGST against CGST? No. This is the one set off the law never allows.

So when a question asks “there is no offset available between which GST?” or “cross utilisation of ITC is not allowed between...”, the answer is CGST and SGST (or UTGST).

What input tax credit cannot pay

Your credit can pay only output tax. These are always paid in cash, from your Electronic Cash Ledger:

• Tax under reverse charge. The law's meaning of “output tax” leaves it out. More in our guide on cash or credit when you pay GST.
• Interest, late fee and penalty. To work out the interest, use our GST interest and late fee calculator.
• GST with cess credit. Cess credit pays only cess. It cannot pay IGST, CGST or SGST.

The 1% cash rule (rule 86B). If the value of your taxable sales in a month (not counting exempt and zero-rated sales) is above ₹50 lakh, your credit can pay at most 99% of your output tax. At least 1% is paid in cash. The rule does not apply if, for example:

• you (or the owners or directors the rule lists) paid more than ₹1 lakh income tax in each of the last two years;
• you got a refund of more than ₹1 lakh of unused ITC in the last financial year;
• you have already paid more than 1% of your output tax in cash this financial year, counted up to this month;
• you are a Government department, a public sector undertaking, a local authority or a statutory body.

The GST officer can also lift the rule after checks. When you tick the rule 86B box, the calculator tells you if your cash is below 1%.

How set off works in GSTR-3B

You do the set off when you file GSTR-3B, in the payment table (Table 6.1).

1. The portal shows your credit ledger and cash ledger balances.
2. It fills in a suggested use of your credit for each tax head. This is only a suggestion. You can change it.
3. When you change the credit used, the cash needed changes too.
4. If your cash ledger is short, the portal makes a challan for the shortfall. You pay it, then come back and file. Our guide on how to pay GST online shows the steps.

Our reading: the credit you can use is your Electronic Credit Ledger balance, which includes the ITC you claim in the same GSTR-3B.

Use this calculator to check the portal's suggestion before you file. If the two differ, check the order rules above.

GST set off journal entries

Many accountants record the set off like this. The figures are from Example 1.

1. When you pay the challan:

2. When you file GSTR-3B (set off of CGST):

3. Set off of SGST:

This is a common way to record it, not a rule of GST law. Your accountant or software may use other ledger names.

What this calculator does not do

• Check if your credit can be claimed. It takes your figures as they are. For the claim rules, see how input tax credit works.
• Old dues. Tax due for earlier periods is settled before this period's tax. Enter one period at a time.
• Reverse charge, interest, late fee, penalty and cess. These are paid in cash or from their own credit, as explained above.
• The 1% rule in full. With rule 86B ticked, it warns you, but it does not choose the head for the 1%.
• The portal's own split. The portal may suggest a different split of IGST credit. Your cash total should be the same if the gaps are covered first.