CGST Rules Rule 86B — Restrictions on use of amount available in electronic credit ledger

CGST Rules, 2017 · Restrictions on use of amount available in electronic credit ledger

CGST Rules 2 Amendments

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Rule 86B of the CGST Rules, 2017 governs Restrictions on use of amount available in electronic credit ledger. It establishes the detailed procedural framework and compliance requirements necessary to implement the corresponding provisions of the CGST Act. Rule 86B CGST: Restrictions on use of amount available in electronic — eligibility, conditions, case laws and compliance impact under Indian tax law.

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Rule 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:¹

Provided that the said restriction shall not apply where -¹

(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; or¹

(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; or¹

(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; or¹

(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; or¹

(e)the registered person is -¹

(i)Government Department; or¹

(ii)a Public Sector Undertaking; or¹

(iii)a local authority; or¹

(iv)a statutory body:¹

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.¹

(f)the registered person other than a manufacturer shall be exempted from the provisions of this rule only in respect of goods specified under rule 31D, on which the tax has been paid by the supplier on the basis of retail sale price:²

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Amendment History

12Superscript numbers in the text mark amended passages — click them to jump here. Click "↑ view in text" to jump back.

2021↑ view in text

Inserted (w.e.f. 01.01.2021) vide Notification No. 94/2020 - CT dated 22.12.2020.

2026↑ view in text

Inserted (w.e.f. 01.02.2026) vide Notification No. 20/2025 - CT dated 31.12.2025.

CGST Rules Rule 86B — Restrictions on use of amount available in electronic credit ledger

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Amendment History

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