GST
Getting partial release of blocked credit
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Facts
Yes. The officer can allow debit fully or partly under Rule 86A(2). The CBIC guidelines also say the block should not exceed the credit believed to be ineligible.
Provisions and law
- Rule 86A(2), CGST Rules 2017The officer may allow the debit, fully or partly, once satisfied that the conditions no longer exist
- 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
Analysis
If your ledger has ₹10 lakh and the suspect supplier's invoices carry ₹1.8 lakh of tax, blocking ₹10 lakh goes beyond the guidelines. Ask for release of ₹8.2 lakh while you prove the ₹1.8 lakh. Show the working clearly: total blocked, invoices from the suspect supplier, and the difference.
Conclusion
- Work out the tax on invoices from the suspect supplier only.
- Prepare a table comparing that figure with the amount blocked.
- Ask for immediate release of the excess under Rule 86A(2).
- Attach evidence for the suspect invoices too.
- Follow up for a written order.
A Savvy can do this for you
Credit ledger blocked under Rule 86A: representation and unblocking
₹4,999
Get this doneAsk a Savvy on WhatsAppGeneral guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.