Restrictions on use of amount available in electronic credit ledger
Notification No. 94 /2020 – Central Tax : CGST (Fourteenth Amendment) Rules, 2020. inserted Rules 86B of CGST Rules 2017
In the said rules, after rule 86A, with effect from the 1st day of January, 2021, the following
rule shall be inserted, namely: –
“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:
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(43 of 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
(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; 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; 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.”.