GST
Block based only on suspicion
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Facts
No. The CBIC guidelines say a block must rest on material evidence and not mere suspicion. A vague reason is a ground to seek removal.
Provisions and law
- Rule 86A(1), CGST Rules 2017Officer not below Assistant Commissioner may disallow debit of ITC, for recorded reasons, to pay any liability or claim any refund, where the credit looks fraudulent or ineligible on listed grounds
- CBIC guidelines on Rule 86A, 2 November 2021Blocking needs material evidence and is not to be done mechanically or on mere suspicion
Analysis
Rule 86A(1) requires 'reasons to believe' recorded in writing, and the guidelines warn against mechanical blocking. Ask what material the officer relied on, such as a report that the supplier was not found at the address. Example: a reason that only says 'supplier risky' gives you a strong point; ask for the material and offer your evidence.
Conclusion
- Ask for the material relied on.
- Point out the guideline on material evidence.
- Give your evidence of genuine purchases.
- Request release of the credit.
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ITC blocked
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