Applicability of Rule 86b i.e, 1% payment of tax in cash applicable to cess also?

[Nikhil Ramnani]

Hi everyone, whether rule 86B which prescribes mandatory 1% payment of tax in cash is applicable to Compensation Cess charged on output supply?

[Raam Srinivasan Swaminathan Kalpathi]

As Cess is not levied under the provisions of CGST Act, 2017 the provisions of Rule 86B, in my opinion, will not apply.

[Sadanand Bulbule]

Rule 86B does not apply to Compensation Cess because the rule strictly restricts the discharge of "output tax" (defined only as CGST/SGST/IGST), whereas Cess is an independent levy governed by its own parent Act and ring-fenced within its own credit pool.

AI Summary

Rule 86B and Compensation Cess: whether mandatory cash payment requirements extend to cess charged on output supplies The issue concerns whether Rule 86B, which prescribes mandatory payment of a specified portion of GST liability in cash, also applies to Compensation Cess charged on output supplies. The discussion considers whether Compensation Cess forms part of the liability subject to the cash-payment requirement, without providing a definitive conclusion.