Answer

1. F

   Facts

   While credit is blocked, tax that it would have covered must be paid in cash. A short cash plan for the block period helps avoid late payment interest.

2. P

   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 50(1), CGST Act 201718 percent a year interest on late tax
3. A

   Analysis

   Rule 86A can last up to a year, and late payment brings interest under Sec 50(1). Work out the monthly extra cash needed and plan for it. Example: blocked ₹6 lakh, monthly output tax ₹2 lakh of which ₹1.5 lakh was usually set off by credit; you need about ₹1.5 lakh extra cash each month until new credit builds up. Push the representation in parallel.

4. C

   Conclusion

   1. 1Estimate monthly tax payable in cash during the block.
   2. 2Arrange working capital or adjust payment terms.
   3. 3Pay on time to avoid interest.
   4. 4Push for release with evidence.

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