Can IGST Balance of One GSTIN Be Used to Discharge SGST of Another GSTIN Under Same PAN?

Multiple GST registrations under a single PAN often create a practical mismatch: one registration sits with surplus funds in its Electronic Cash Ledger, while another struggles to meet its tax dues. The introduction of Form GST PMT-09 and the later insertion of Rule 87(14) in the CGST Rules were specifically aimed at easing this cash-flow challenge.

This write-up explains:

  • What the law permitted before the amendment
  • What Rule 87(14) and Notification No. 14/2022 changed
  • How IGST cash can now be moved between GSTINs under the same PAN
  • Whether and how such transferred IGST can ultimately be used to pay SGST
  • Practical boundaries and compliance points to remember

Under the GST structure, every GSTIN is treated as a separate taxable person, even if multiple registrations are taken under a single PAN. This meant:

  • Each GSTIN had its own Electronic Cash Ledger
  • Cash deposited under one registration could not be used directly by another
  • Cross-utilisation or cross-transfer of cash balance between GSTINs was not permitted

Limited Role of Form GST PMT-09 Initially

Originally, Form GST PMT-09 served a very narrow function:

  • It allowed an assessee to reallocate amounts only within the same GSTIN
  • Reallocation could be done:
    • Between major heads (IGST, CGST, SGST/UTGST, Cess)
    • Between minor heads (Tax, Interest, Penalty, Fee, Others)

Important:
PMT-09 did not permit movement of cash balance from one GSTIN to another. It merely allowed reshuffling within a single registration’s Electronic Cash Ledger.

Practical Difficulty for Businesses

This earlier position resulted in a number of issues, especially for large entities or groups operating in multiple States:

  • One branch might have excess IGST or CGST cash lying unused
  • Another branch under the same PAN might be short of funds to discharge its GST liabilities
  • Despite having enough money blocked in one GSTIN, the assessee was forced to deposit fresh funds for the other GSTIN

For instance, consider Mr. Sharma, who runs operations in two different States with two separate GSTINs under his PAN:

  • GSTIN–1 has an unused IGST cash balance of Rs. 1.25 lakh
  • GSTIN–2 needs Rs. 1.10 lakh to pay its current SGST liability

Before Rule 87(14) was introduced, GSTIN–2 could not use GSTIN–1’s surplus cash. The only option was a fresh deposit, leading to unnecessary blockage of working capital.

Introduction of Rule 87(14) and Policy Intent

Notification No. 14/2022 – Central Tax

To ease this long-standing concern, the Government inserted Rule 87(14) into the CGST Rules via Notification No. 14/2022 – Central Tax dated 5 July 2022. The clear objective was:

  • To permit limited transfer of unutilised cash balance between GSTINs under the same PAN
  • To align the portal functionality (via PMT-09) with this new legal permission

Core Features of Rule 87(14)

Broadly, Rule 87(14) provides that:

  • A registered person may transfer amounts from the Electronic Cash Ledger of one GSTIN to another GSTIN under the same PAN
  • Such transfer can be made using Form GST PMT-09
  • It is subject to specified conditions, the most significant being:
    • There should be no outstanding liability in the GSTIN from which the cash is being transferred

Note:
The transfer is purely a cash movement within the Electronic Cash Ledgers. It does not involve Input Tax Credit (ITC) at all. ITC continues to be governed by its own utilization rules and cannot be moved between GSTINs through this mechanism.

Enabling Functionality on GST Portal

Post amendment: