Rule 86B. Restrictions on use of amount available in electronic credit ledger.-
Inserted (w.e.f. 01.01.2021) vide Notification No. 94/2020 – CT dated 22.12.2020.
Notwithstanding anything contained in these rules, the registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of 99% of such tax liability, in cases where the value of taxable supply other than exempt supply and zero-rated supply, in a month exceeds 50 lakh rupees:
It means if any Registered person under GST, have Taxable supply above Rs.50 Lakh in a month, then he has to pay atleast 1% GST liability through Electronic Cash Ledger mandatorily.
Above Restriction does not apply where:
(a) the said person or the proprietor or karta or the managing director or any of its two partners, whole-time Directors, Members of Managing Committee of Associations or Board of Trustees, as the case may be, have paid more than one lakh rupees as income tax under the Income-tax Act, 1961(43 of 1961) in each of the last 2 financial years for which the time limit to file return of income under subsection (1) of section 139 of the said Act has expired; or
(b) the registered person has received a refund amount of more than one lakh rupees in the preceding financial year on account of unutilised input tax credit under clause (i) of first proviso of sub-section (3) of section 54 (Zero Rated Supply) or
(c) the registered person has received a refund amount of more than one lakh rupees in the preceding financial year on account of unutilised input tax credit under clause (ii) of first proviso of sub-section (3) of section 54 (Inverted Duty Structure) or
(d) the registered person has discharged his liability towards output tax through the electronic cash ledger for an amount which is in excess of 1% of the total output tax liability, applied cumulatively, upto the said month in the current financial year; or
(e) the registered person is –
(i) Government Department; or
(ii) a Public Sector Undertaking; or
(iii) a local authority; or
(iv) a statutory body:
Provided further that the Commissioner or an officer authorised by him in this behalf may remove the said restriction after such verifications and such safeguards as he may deem fit.
Understand This with Below Example:
From July 2023, A new facility to see Rule 86B Compliance is activated on GST Portal too, Go to services - Returns - Rules 86B Compliance
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