[DEC] Rule 86B in Goods and Services Tax (GST) rules

Question 1

Context?

Answer 1

Central Board of Indirect Taxes and Customs (CBIC) has introduced Rule 86B in Goods and Services Tax (GST) rules which restricts use of input tax credit (ITC) for discharging GST liability to 99 per cent.

As per the new rule, Businesses with monthly turnover of over ₹50 lakh will have to mandatorily pay at least 1 per cent of their GST liability in cash.

[GST BHARNYASATHI TOTAL AMOUNT CHYA 99% RAKKAM INPUT TAX CREDIT NE ; 1% RAKKAM COMPULSORY CASH -> JYANCHA MONTHLY TURNOVER ABOVE 50 LAKHS]

Question 2

What is Input Tax Credit (ITC)?

Answer 2

It is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale.

In simple terms, input credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs and pay the balance amount.

[INPUT VIKAT GHETALE -> TYA TAX CHI RECEIPT DAKHAVA(AKA GST BILL) -> FINAL TAX BHARTANNA TO REDUCE KARUN MILEL]

Question 3

Exceptions?

Answer 3

will not apply where the managing director or any partner have paid more than ₹1 lakh as income tax or the registered person has received a refund amount of more than ₹1 lakh in the preceding financial year on account of unutilised input tax credit.

[MD -> PAID 1 LAKH INCOME TAX ; LAST YEAR 1 LAKH+ REFUND GHETALA ASEL]