07/03/2021
Rule 86b of GST Restriction on use of amount available in Electronic Credit Ledger:-
-As per this rule Certain taxpayers cannot make payment from their electronic credit ledger in excess of 99% of the total tax liability for the tax period from 1 january 2021.
The Rule 86B in words of the law is-
“86B. Restrictions on use of amount available in electronic credit ledger.- 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 ninety-nine per cent. of such tax liability, in cases where the value of taxable supply other than exempt supply and zero-rated supply, in a month exceeds fifty lakh rupees:
Meaning thereby-
if sale (excluding exempt or zero rated sales) is more than 50 lakhs in a month
than 1% of "output tax lIability" of that month (neither the taxable value nor net tax liability) shall be paid in cash.
Provided that the said restriction shall 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 in each of the last two 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
Meaning thereby said person has paid income tax of more than 1 lakhs in two preceding FY, the year of which due date has expired u/s 139(1).
For ex. if assessee is filling GST return for May 2021, he shall check weather income tax paid in FY 18-19 and FY 19-20, the year of which due date u/s 139(1) has expired, of more than Rs. 1 lakh.
(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
i. e., zero rated supply made without payment of taxes; 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
i. e., Inverted duty structure: Where the credit has accumulated on account of rate of tax on inputs being
higher than the rate of tax on output supplies (other
than nil rated or fully exempt supplies), except supplies
of goods or services or both as may be notified by the
Government on the recommendations of the Council.
This would include even those cases where supply has
been made to merchant exporters; 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
for ex. if person is filling return for August 2021 and has paid more than 1% of cumulative output tax liability (from April to July 2021) in cash, he is exempted to obey this rule; 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:
