Quick Summary
GSTN has introduced a new tab, Rule-86B, which restricts the use of the amount available in the Electronic Credit Ledger. Under this rule, a 99% restriction is imposed on the ITC available in the Electronic Credit Ledger of a Registered Person. This implies that 1% of the output liability must be paid in cash. The limitation is applicable when the value of taxable supply, excluding exempt and zero-rated supply, in a month exceeds Rs. Fifty Lakh Rupees.
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FAQ :
Rule 86B is a new tab implemented by GSTN that restricts the use of funds available in the Electronic Credit Ledger.
Under Rule 86B, only 99% of the input tax credit (ITC) available in the Electronic Credit Ledger can be used.
It means that at least 1% of the output tax liability must be paid in cash, rather than solely using the Electronic Credit Ledger.
This limitation is applicable when the value of taxable supply, excluding exempt and zero-rated supply, in a month exceeds £50 lakh.
Registered persons whose monthly taxable supply value, excluding exempt and zero-rated supplies, surpasses £50 lakh are affected by this rule.
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