Restriction on input tax credit use: officers may block electronic credit ledger debits pending verification of eligibility. The amendment reduces the mandatory input tax credit reversal under rule 36 from 20 per cent to 10 per cent and inserts rule 86A authorising the Commissioner or an authorised officer to withhold debits from the electronic credit ledger where there are recorded reasons to believe credit was fraudulently availed or is ineligible, including claims based on invoices from non existent registrants, without receipt of goods or services, where tax on the supply was not paid, or absent prescribed documents; the restriction may be lifted when conditions cease to exist and ends after the prescribed restriction period. Rule 138E is also expanded to permit action where outward supply statements are not furnished for two tax periods.
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Provisions expressly mentioned in the judgment/order text.
Restriction on input tax credit use: officers may block electronic credit ledger debits pending verification of eligibility.
The amendment reduces the mandatory input tax credit reversal under rule 36 from 20 per cent to 10 per cent and inserts rule 86A authorising the Commissioner or an authorised officer to withhold debits from the electronic credit ledger where there are recorded reasons to believe credit was fraudulently availed or is ineligible, including claims based on invoices from non existent registrants, without receipt of goods or services, where tax on the supply was not paid, or absent prescribed documents; the restriction may be lifted when conditions cease to exist and ends after the prescribed restriction period. Rule 138E is also expanded to permit action where outward supply statements are not furnished for two tax periods.
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