GST
Block on one tax head only
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Facts
Yes. A block applies to the amounts and heads shown in the ledger. Unblocked credit can be used under the normal set-off order.
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
- Sec 49, CGST Act 2017Payment of tax, interest and other amounts and order of using credit
Analysis
Rule 86A disallows debit of an amount equal to the suspect credit, and portals show it head by head. Use the free CGST and SGST credit under Sec 49 set-off rules and pay the shortfall in cash. Example: IGST ₹2 lakh blocked, CGST ₹1 lakh and SGST ₹1 lakh free, output CGST ₹1.2 lakh and SGST ₹1.2 lakh; use the free credit and pay ₹40,000 in cash.
Conclusion
- Check the ledger head by head.
- Use unblocked credit in the correct order.
- Pay the shortfall in cash.
- File GSTR-3B on time.
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