Answer

1. F

   Facts

   Rule 86A is a temporary freeze on part of your input tax credit. The credit stays in your ledger, but you cannot use it to pay tax or claim a refund while the block lasts.

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(1) allows an officer to stop debit of credit he has reason to believe was fraudulently availed or is ineligible, for example because a supplier was non-existent. It is not a final finding. Under Rule 86A(3), the block ends one year after it was imposed. Example: ₹3 lakh blocked in your ledger stays there; you just cannot use it for your monthly GSTR-3B until it is released or lapses.

4. C

   Conclusion

   1. 1Check the blocked amount and date in your credit ledger.
   2. 2Understand that this is a freeze, not a demand.
   3. 3Plan to pay output tax in cash meanwhile.
   4. 4Ask for the reasons and start collecting 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.