GST Update – Rule 86B introduced vide notification 94/2020 dated 22.12.2020

Effective from 1^st January, 2021, where the value of taxable supplies (sales) [except exempt supplies and zero rates supplies] exceeds Rs.50 lakhs in a month, then 1% tax liability of GST needs to discharged in cash (without set-off of ITC).

Few Exceptions to above rule are as under:

1. Where the company/firm or its legal owners/directors has paid Income Tax exceeding Rs.1 Lakh in two preceding financial year of which due date to file Income Tax return has expired.
2. Where the taxpayer has received refund exceeding Rs.1 Lakh in previous financial year because of unutilized ITC due to zero rated supply or supply of goods falling under inverted duty structure.
3. Where the taxpayer paid in cash liability on outward supplies (sales) which cumulatively makes 1% of total tax liability up to the month in current year.
4. Where tax payer is a Government Department, Public Sector Undertaking, local authority or statutory body.

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The purpose of this blog is for education purpose and should not be construed as professional advice. Views expressed herein are the personal views of the author. Government or judicial authorities may or may not subscribe to the views expressed herein. Author of the blog is not liable for any implications arising out of actions taken based on the views expressed herein.