GST Rules 86B

Rules 462 views 3 replies

prashant Kumar Singh

student

255 Points Posted on 04 April 2026

How to rectify the violation of rule 86 B of CGST

Replies (3)

Quick Summary

Rule 86B requires 1 percent GST payment in cash if turnover exceeds 50 lakh. If violated, pay shortfall via DRC 03 with interest. No return revision allowed. Check exemptions and ensure future compliance.

Aashok FC Advisory

Finance Compliance Consultant

1001 Points Posted on 04 April 2026

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

Vikas khanna

152 Points Posted on 09 April 2026

Rectification of Rule 86B Violation

Pay Shortfall via DRC-03:
Deposit the required 1% cash shortfall immediately using Form DRC-03.
Interest (if applicable):
Pay interest under Section 50, depending on delay and nature of short payment.
ITC Treatment:
No direct refund via RFD-01. Re-credit, if any, is handled as per GST provisions and officer verification (not automatic).
Future Compliance:
Ensure at least 1% tax is paid in cash where monthly taxable turnover exceeds ₹50 lakh (subject to exemptions).

For more GST compliance and practical guidance, you can refer to Setindiabiz.

Tax Garden

Tax Consultant

730 Points Posted on 13 April 2026

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.