Electronic Credit Ledger blocking cannot continue beyond one year under Rule 86A(3); continued restraint is unsustainable.

Rule 86A(3) of the CGST Rules limits blocking of the Electronic Credit Ledger to one year from the date the restriction is imposed. The restriction therefore ceases automatically on expiry of twelve months, and any continued blocking beyond that period is contrary to the express statutory mandate. As the ledger here had been blocked on 21.11.2024, continuation of the restriction after one year was unsustainable, and the authorities were directed to unblock the Electronic Credit Ledger forthwith.

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Issues: Whether the blocking of the Electronic Credit Ledger could continue beyond one year from the date of imposition under Rule 86A(3) of the Central Goods and Services Tax Rules, 2017.

Analysis: The restriction under Rule 86A(3) ceases to have effect on the expiry of one year from the date on which it is imposed. The blocking in question was imposed on 21.11.2024, and the continued operation of the restriction beyond the one-year period was contrary to the express statutory mandate. The continuation of the blocking after expiry of twelve months was therefore unsustainable.

Conclusion: The continued blocking of the Electronic Credit Ledger beyond one year was illegal, and the restriction was deemed to have ceased after twelve months. The authorities were directed to unblock the Electronic Credit Ledger forthwith.

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