Answer

1. F

   Facts

   A block after a search usually relates to suppliers under investigation. You can still ask for reasons and give evidence, while cooperating with the investigation.

2. P

   Provisions and law

   • Rule 86A(1), CGST Rules 2017Commissioner or authorised officer, not below Assistant Commissioner, may disallow debit of ITC for recorded reasons where the supplier or recipient is non-existent, goods were not received, tax was not paid or there is no valid document
   • CBIC guidelines on Rule 86A, 2 November 2021Block must rest on material evidence, not suspicion; amount not more than the suspect credit; monetary limits for officer ranks; taxpayer may give evidence for review
3. A

   Analysis

   Rule 86A blocks often follow investigation findings. Keep your responses consistent across the investigation and the representation. Do not pay large amounts under pressure during the search; any payment should be your considered decision through DRC-03. Example: if investigators link 3 suppliers to bill trading, focus your representation on those suppliers and seek release of the rest.

4. C

   Conclusion

   1. 1Get a copy of any panchnama and statements recorded.
   2. 2Identify which suppliers are under question.
   3. 3Ask the officer for reasons for the block.
   4. 4Give invoice-wise evidence for those suppliers.
   5. 5Take legal advice before any payment or statement.

Payments made under pressure during a search are hard to recover later.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.