exception to rule 86B-Income tax paid in excess of Rs. 1 Lac in each of last 2 financial years

[SUSHIL BANSAL]

Dear experts,

Rule 86B of the CGST Rules, 2017 provides that the restriction on utilization of ITC shall not apply where:

'the registered person or the proprietor or karta or managing director or any of its partners, as the case may be, has paid more than Rs. 1,00,000 as income tax under the Income-tax Act, 1961 in each of the last two financial years for which the time limit to file return of income under section 139(1) has expired.'

from the above exceptions I have certain queries:

The exception talks about Income tax paid. Whether Income tax paid will sum of TDS, TCS, Advance tax, Self-assessment tax or it will be net of refund.

Further the exception talks about income tax paid in last 2 F.Y. for which the time limit to file return of income under section 139(1) has expired. Suppose We want to check exception for F.Y.2021-22, then for which 2 F.Y. we will check Income tax paid. whether it will be FY 2019-20 & 2020-21 or fy 2020-21 & 2021-22.

AI Summary

Income tax paid exception: clarification sought on which tax components count and which financial years apply under Rule 86B. Queries on the Rule 86B exception: whether ''income tax paid'' includes TDS, TCS, advance tax and self assessment tax and whether it is net of income tax refunds; and which two financial years qualify as ''the last two financial years for which the time limit to file return of income under section 139(1) has expired'' for purposes of testing the exception.