The GST Portal has updated GSTR-3B (Table 6.1) from January 2026 tax periods, offering taxpayers flexible utilisation of CGST and SGST ITC after exhausting IGST credit. This is a system enhancement for better cash flow, not a statutory change (Section 49 CGST Act and Rule 88A remain unchanged).
Key Changes
| Feature | Old System (Pre-Jan 2026) | New System (Jan 2026 Onward) |
|---|---|---|
| IGST ITC | Used first (mandatory) | Used first (mandatory) |
| CGST/SGST after IGST | Forced sequence: CGST then SGST | Flexible: Choose CGST only, SGST only, or any mix |
| Cash Impact | Often higher (SGST credits unused) | Lower (optimize credits to minimize cash payments) |
Practical Example
ITC Balances: IGST ₹1,50,000; CGST ₹2,50,000; SGST ₹2,00,000
IGST Liability: ₹5,00,000
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Old: IGST ₹1,50,000 → CGST ₹2,50,000 → SGST ₹1,00,000 (₹1,00,000 SGST unused).
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New: IGST ₹1,50,000 → Choose e.g., SGST ₹2,00,000 + CGST ₹1,50,000 (preserves CGST if needed).
Action Points for Taxpayers
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Exhaust IGST ITC first (portal-enforced).
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Select optimal CGST/SGST mix for remaining IGST liability
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Review balances pre-filing to cut cash outgo.