The GSTN has released an important update regarding interest collection and ITC utilisation in GSTR-3B, in continuation of its earlier advisory dated 30th January 2026.

What Is the Key Update?

From the February 2026 return period onwards, the GST Portal will allow:

• Complete utilisation of IGST ITC first
• After exhausting IGST credit, taxpayers can use
  CGST or SGST ITC in any order
  to pay IGST liability

This provides greater flexibility while filing GSTR-3B.

Why This Matters

✅ Better cash flow management
✅ Reduced chances of interest liability
✅ Improved ITC planning
✅ More practical and business-friendly system

This enhancement helps businesses optimise available credits and reduce unnecessary cash payments.

What Businesses Should Do

• Review ITC balances
• Update internal GST working sheets
• Monitor February 2026 GSTR-3B filing carefully
• Recheck interest calculations if applicable

🔗 Official Advisory PDF:
https://tutorial.gst.gov.in/downloads/news/advisory_on_interest_calculator.pdf

Conclusion

This update by GSTN improves flexibility in ITC utilisation and strengthens compliance efficiency. Businesses should stay updated and ensure proper implementation during GSTR-3B filing from February 2026 onwards.

Disclaimer:
This article is for informational purposes only and is based on the advisory issued by GSTN dated 19th February 2026. Readers are advised to refer to the official GST portal or consult a tax professional for specific guidance.