Find
Under Rule 86B, certain registered persons whose taxable supply value in a month is above Rs 50 lakh cannot use credit for more than 99 percent of output tax. At least 1 percent must be paid in cash, unless an exception applies.
GST
Rule 86B: paying 1 percent in cash
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Provisions
Rule 86B, CGST Rules 2017; Sec 49(4), CGST Act 2017
Analysis
Exceptions include persons who paid more than Rs 1 lakh income tax in each of the last two years, exporters with refunds above Rs 1 lakh, and persons who have paid 1 percent cumulative tax in cash. Example: output tax Rs 10 lakh, ITC Rs 12 lakh; without an exception you pay at least Rs 10,000 in cash. Check the full list of exceptions each year.
Close
- Check monthly taxable supplies against Rs 50 lakh
- Check if any Rule 86B exception applies
- If not, pay at least 1 percent of output tax in cash
- Keep proof of exception if you rely on one
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