GST Rules 86B

• Rule 86B requires minimum 1% GST payment in cash

• If violated:

  • ✔ Pay shortfall via DRC-03

  • ✔ Pay interest @ 18%

  • ✔ Ensure compliance going forward

   

• ❌ Cannot correct via return revision

Rule 86B applies only in months where your total taxable supply exceeds Rs 50 lakh. If it applies to you, at least 1% of your output GST liability must be paid from the cash ledger — you cannot use ITC for the full amount. However, there are three exceptions: (1) your company directors paid income tax of Rs 1 lakh or more in either of the last two FYs, (2) you received a GST refund of Rs 1 lakh or more in the previous FY, or (3) your business has zero-rated supplies (exports). If any exception applies, you are not bound by the 1% cash rule. Check your cash ledger balance at the start of each month where your supplies may cross Rs 50 lakh — insufficient balance can block your GSTR-3B filing.