Rule 86B under the GST Regime Rule 86B is a provision introduced under the Goods and Services Tax (GST) regime to restrict the use of Input Tax Credit (ITC) for paying output tax liability. Applicability: This rule applies to registered persons whose taxable value of supply (excluding exempt supply and zero-rated supply) in a month exceeds Rs. 50 lakh.
Key Provisions on Rule 86B under the GST Regime :
GST Rule 86B is a measure to ensure that registered persons with significant taxable supplies make a minimum cash payment of their output tax liability, reducing the scope for fraudulent ITC claims and increasing tax compliance.
Rule 86B is a new rule introduced under the GST regime that restricts the use of input tax credit (ITC) available in the electronic credit ledger for paying the output tax liability. This rule is applicable to registered persons who have a taxable value of supply (other than exempt supply and zero-rated supply) in a month exceeding Rs. 50 lakh. According to this rule, such persons cannot use more than 99% of their ITC balance to discharge their output tax liability, and they have to pay at least 1% of their output tax liability in cash. This rule is aimed at preventing tax evasion and fraud by unscrupulous taxpayers who claim fake ITC and do not pay any tax in cash.
The rule 86B is to be checked on the basis of the GST returns of the firm, not the ITR of the firm or the directors
Budget 2025: Amendment in carry forward of losses 72A & 72AA This amendment is a significant move by the government… Read More
Post Budget 2025: Applicability of Sec 87A on old & New regimes In this blog explain the impact of Budget… Read More
Statutory Compliance Calendar (Due Dates) for the month of January 2025. In January 2025, businesses in India must adhere to… Read More
Cabinet approved New Income Tax Bill to replace Old tax Law The Union Cabinet has approved a new Income Tax… Read More
Practical Aspects of Financial Statements & Audit Reports, including IFC Practical Aspects of Financial Statements & Audit Reports, including CARO… Read More
𝐋𝐚𝐭𝐞𝐬𝐭 𝐔𝐩𝐝𝐚𝐭𝐞𝐬 𝐢𝐧 𝐏𝐅 & 𝐄𝐒𝐈𝐂, & HR related Judgement and update 🚨 Staying updated on the latest developments in… Read More