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GST

Electronic credit ledger blocked under Rule 86A

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Under Rule 86A, an officer can block the use of credit in your electronic credit ledger if there is reason to believe it was taken on fake invoices or from non-existent suppliers. The block lapses after one year. It must be based on recorded reasons.

Provisions

Rule 86A, CGST Rules 2017; Sec 155, CGST Act 2017

Analysis

CBIC guidelines require the officer to have material evidence and to record reasons, and the block should be limited to the amount of doubtful credit. Example: Rs 4 lakh credit from one supplier is under doubt, so blocking your entire Rs 20 lakh ledger is open to challenge. Ask for the reasons, submit your proof file and request the block be limited or lifted.

Close

  1. Check the blocked amount in the credit ledger and the order details
  2. Ask the officer in writing for the reasons recorded
  3. Submit invoice, transport, receipt and payment proof for the supplier
  4. Request that the block be limited to the doubtful amount
  5. Take legal advice if the block is excessive or without reasons

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