Indore: Recent updates to the GST portal’s regulations regarding the use of input tax credit (ITC) for settling integrated goods and services tax (IGST) obligations have led to significant confusion among taxpayers. In response, the Madhya Pradesh Tax Law Bar Association has formally requested clarification from the state tax department.
In a memorandum submitted to the commercial tax and state GST office in Indore on Friday, the association expressed concern over the frequent changes in advisories issued by the GST Network (GSTN) and the corresponding adjustments made to the portal. These changes have resulted in uncertainty for taxpayers when it comes to filing their returns.
Advocate A. K. Lakhotia, president of the association, highlighted the problem: “The inconsistency between the portal’s functionality and the advisory changes has created a great deal of confusion among taxpayers. Many have filed their returns based on the portal’s behavior at that given time.”
Under the provisions of the CGST Act, there is a clear hierarchy for using ITC to offset IGST liabilities, prioritizing CGST credit over SGST. However, a GSTN advisory issued on January 30, 2026, permitted taxpayers to utilize CGST and SGST ITC for IGST liabilities in any order. The portal was accordingly updated for filings made in February.
The complications emerged when, for the March returns, the portal reverted to the previous statutory sequence, and the earlier advisory was modified on the portal. This left taxpayers questioning the validity of returns that had already been submitted.
The association is urging authorities to recognize the ITC utilization carried out in February 2026 as valid and to implement any changes only going forward. They are also seeking assurances for taxpayers against any demands, interest charges, or penalties stemming from this issue. The association is calling for a comprehensive circular, emphasizing the need for uniform guidelines to prevent future disputes and to enable taxpayers to maximize the use of available ITC without ambiguity regarding the adjustment sequence across IGST, CGST, and SGST.