CAs Frustrated as GST Portal Blocks SGST ITC Despite GSTR-3B Deadline Approaches

With February 20th deadline for filing GSTR-3B looming, Chartered Accountants (CAs) and taxpayers across India are reporting fresh hurdles on the GST portal.

Despite recent advisories promising flexible cross-utilisation of Input Tax Credit (ITC), many users say the system is blocking SGST ITC set-off against IGST unless CGST is fully exhausted—contradicting the GSTN’s own guidance.

If you are GST registration is cancelled, and you file your last GSTR-3B return late, you will have to pay interest. That interest will be collected when you file your final return (GSTR-10).

From January 2026 onwards, the GST portal will automatically fill in the tax liability breakup table forerlier supplies that you are reporting now. These auto- filled numbers are just suggestions. The taxpayer is responsible for checking them and correcting if needed.

GST Portal Blocks SGST Set-Off for IGST Unless CGST is Exhausted, Despite GSTN Advisory

Once IGST credit is used up, you can pay IGST liability using CGST or SGST ITC in any order.

Interest will now be charged only on the net cash liability (the part you actually pay in cash), not on the total tax. The system will calculate this automatically using a new formula under Section 50 and Rule 88B. You cannot reduce the auto-calculated interest, but you can increase it if you think more is due by self-assessment.

Even though the advisory says you can use SGST ITC to pay IGST once IGST credit is exhausted, many taxpayers are finding that the portal is blocking SGST ITC unless CGST is fully used first. This has caused confusion and frustration, especially with the Feb 20 GSTR-3B deadline.

It is also very important to note that CAs are receiving many calls and complaints about this issue.

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