Rule 86B under CGST Act

[gunda ashok kumar]

One of my client has set off output tax with 100% ITC department issued notice to pay 1% cash.As per the frequent questions any month limit Rs.50 lakhs is not crossed but the turnover is more than Rs.6 crores in a financial year Rule 86B does not need to be complied with.If the turnover is less than Rs.6 crores in a financial year but the taxable supplies for any month exceeds Rs. 5o lakhs the Rule 86B stands attracted. I request the experts please clarify the issue how to proceed in the matter regarding if cash payment is made 1% how to get ITC

[Shilpi Jain]

cs given in rule 86B are not satisfied, the month in which the turnover exceeds 50L 1% will have to be paid in cash. 

The annual turnover is of no relevance.

[Shilpi Jain]

The implication could be payment is can and taking re credit. Also interest liability for the cash component.

[gunda ashok kumar]

Pl inform any case laws on rule 86BCGST  till to date

[Raam Srinivasan Swaminathan Kalpathi]

Where is the necessity to refer to a case law in this open and shut point?  As suggested by Madam Shilpi, please remit the tax through DRC-03 challan with interest and avail the excess remittance in the next month's 3B.  We can even mention the same in DRC-03 challan remarks column and intimate the same to the department also.

[KASTURI SETHI]

Case law is required only when law is not clear. In every  situation,  case law is not possible. I agree with  the views of  the experts.

[KUMAR Narasimhan]

Dear Sir / Madam,

If the Taxes had been paid through DRC-03 along with Interest then how it can be reclaim again in GSTR-3B?

[Affirmservicesconsultancy Privatelimited]

Sir

Please clarify that 1% cash in applicable head wise i.e. IGST, CGST & SGST seperately or cumulitive (on total tax amount) as per Rule 86B of CGST Act. 

[KASTURI SETHI]

Total 1 %    payable in cash.   Either IGST 1 %  or  CGST ; 0.50 % and SGST : 0.50%

AI Summary

Cash payment under Rule 86B: a portion of tax must be paid in cash when monthly supplies exceed threshold. Rule 86B requires taxpayers who exceed the monthly taxable-supplies threshold to remit a mandated cash component before availing input tax credit for that month; the monthly threshold - not annual turnover - determines applicability. The cash component is to be paid via the prescribed challan with interest, and any excess may be adjusted in the next month's return, with the cash requirement calculated on aggregate tax and allocable across tax heads.