Answer

1. F

   Facts

   Blocked credit is still your asset until a demand is decided, but it is uncertain. Show it as a separate line in GST credit receivable and disclose the block in notes.

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
   • Rule 86A(3), CGST Rules 2017The restriction ends one year after it was imposed
3. A

   Analysis

   Rule 86A freezes use, not ownership, and Rule 86A(3) ends the block in a year. Your auditor will decide whether a provision is needed based on the strength of your evidence. Example: ₹9 lakh blocked; show 'GST input credit, blocked under Rule 86A, ₹9 lakh' with a note on the date and status. Lenders appreciate clear disclosure.

4. C

   Conclusion

   1. 1Separate blocked credit from usable credit in the books.
   2. 2Add a note on the date, amount and status.
   3. 3Discuss any provision with your auditor.
   4. 4Update the note when the block is lifted or lapses.

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