Answer

1. F

   Facts

   Rule 86B says a registered person whose taxable supply, other than exempt and zero-rated supply, exceeds ₹50 lakh in a month cannot use credit for more than 99 percent of output tax. Exceptions include those who paid more than ₹1 lakh income tax in each of the last two years, and some exporters and refund claimants.

2. P

   Provisions and law

   • Rule 86B, CGST Rules 2017Taxable supply above ₹50 lakh a month must pay at least 1 percent of output tax in cash, with exceptions
   • Sec 49, CGST Act 2017Payment of tax through the electronic cash and credit ledgers
3. A

   Analysis

   With output tax of ₹10,00,000 in a month and ample credit, at least ₹10,000 must be paid in cash unless an exception applies. Check eligibility for exceptions once a year. Not following the rule creates a demand for short cash payment.

4. C

   Conclusion

   1. 1Check if monthly taxable supply exceeds ₹50 lakh
   2. 2Check each exception, such as income tax paid
   3. 3If none applies, pay at least 1 percent of output tax in cash
   4. 4Keep evidence of the exception used

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