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Section 18 of the IGST Act, 2017

From the IndiaAuditLens Law Library

GST›IGST Act, 2017

At a glance

Bars, duties and time limits

  • 18(a)–(b)Integrated-tax credit used for central tax under section 49(5) of the CGST Act or Union territory tax under section 9 of the UTGST Act requires an equal reduction and transfer to the corresponding tax account.
  • 18(c)Credit used for State tax under the relevant State Act requires an equal reduction, apportionment to the appropriate State and transfer to its account.

Procedure, powers and definitions

  • 18 ExplanationFor this Chapter, appropriate State means the State or Union territory where the taxable person is registered or liable to register under the CGST Act.

Section 18 requires transfers between government tax accounts when integrated-tax credit is used to pay central, State or Union territory tax. The integrated-tax collection is reduced by the credit used, and a corresponding amount moves to the relevant account. Each route depends on the applicable statutory utilisation provision, with transfer timing and manner prescribed separately.[1]

Text

The text below is the section as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.[1] The Act as published in the Gazette of India is the legal source.

Section 18, verbatim (show)

Section 18. Transfer of input tax credit. -

On utilisation of credit of integrated tax availed under this Act for payment of,-

(a) central tax in accordance with the provisions of sub-section (5) of section 49 of the Central Goods and Services Tax Act, the amount collected as integrated tax shall stand reduced by an amount equal to the credit so utilised and the Central Government shall transfer an amount equal to the amount so reduced from the integrated tax account to the central tax account in such manner and within such timeas may be prescribed;

(b) Union territory tax in accordance with the provisions of section 9 of the Union Territory Goods and Services Tax Act, the amount collected as integrated tax shall stand reduced by an amount equal to the credit so utilised and the Central Government shall transfer an amount equal to the amount so reduced from the integrated tax account to the Union territory tax account in such manner and within such time as may be prescribed;

(c) State tax in accordance with the provisions of the respective State Goods and Services Tax Act, the amount collected as integrated tax shall stand reduced by an amount equal to the credit so utilised and shall be apportioned to the appropriate State Government and the Central Government shall transfer the amount so apportioned to the account of the appropriate State Government in such manner and within such time as may be prescribed.

Explanation .-For the purposes of this Chapter, " appropriate State " in relation to a taxable person, means the State or Union territory where he is registered or is liable to be registered under the provisions of the Central Goods and Services Tax Act.

Questions to answer on the file

Questions a reviewer answers from the engagement file, grouped by the part of the section they come from. They describe what the section asks; they do not decide it.

Integrated-credit cross-utilisation trigger 18 opening, (a)-(c)

Questions to answer on the file4 questions
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Matching reduction, apportionment and Government transfer 18(a)-(c)

Questions to answer on the file10 questions
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Appropriate State in relation to the taxable person 18 Explanation

Questions to answer on the file2 questions
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Prescribed manner and timing 18(a)-(c)

Questions to answer on the file2 questions
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Provisions connected to Section 18
ProvisionConnectionWords that tie them
Section 49 of the CGST Act, 201718(a) requires Section 49 of the CGST Act, 2017 49(5)18(a) "in accordance with the provisions of sub-section (5) of section 49"

Circulars and notifications

No circular or notification in the CBIC repository is recorded as citing this section.

Unsettled questions

The words of section 18 do not answer this question. Where one decides a matter on the file, the answer depends on the position taken on it.

  1. No additional silent-text interpretation is asserted; disputed factual characterisation remains a person’s task.

See also

References

  1. Central Board of Indirect Taxes and Customs. "Section 18. Transfer of input tax credit". Integrated Goods and Services Tax Act, 2017, CBIC tax information portal. Retrieved 17 September 2026.

External links