TaxTMI 
TaxTMI 
Guidelines for disallowing debit of electronic credit ledger under Rule 86A of the UPSGST Rules, 2017
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.... -Reg. Rule 86A of the Uttar Pradesh Goods and Services Tax Rules, 2017 (hereinafter referred to as "the Rules") provides that in certain circumstances, Commissioner or an officer authorised by him, on the basis of reasonable belief that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible, may not allow debit of an amount equivalent to such credit in electronic credit ledger. 2. Doubts have been raised by the field formations on various issues pertaining to disallowing debit of input tax credit from electronic credit ledger, under rule 86A of the Rules. Further, Hon'ble High Courts in some cases have emphasized the need for laying down guidelines for the purpose of invoking ....
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....red person availing any credit of input tax is not in possession of a tax invoice or debit note or any other document prescribed under rule 36, may, for reason to be recorded in writing, not allow debit of an amount equivalent to such credit in electronic credit ledger for discharge of any liability under section 49 or for claim of any refund of any unutilised amount. (2). The Commissioner, or the officer authorised by him under sub-rule (1) may, upon being satisfied that conditions for disallowing debit of electronic credit ledger as above, no longer exist, allow such debit. (3) Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction." 3.1.2 Perusa....
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....ount from electronic credit ledger in respect of a registered person, only after proper application of mind considering all the facts of the case, including the nature of prima facie fraudulently availed or ineligible input tax credit and whether the same is covered under the grounds mentioned in sub-rule (1) of rule 86A, as discussed in para 3.1.2 above; the amount of input tax credit involved; and whether disallowing such debit of electronic credit ledger of a person is necessary for restricting him from utilizing passing on fraudulently availed or ineligible input tax credit to protect the interests of revenue. 3.1.4 It is reiterated that the power of disallowing debit of amount from electronic credit ledger must not be exercised in a....
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....Deputy Commissioner/Assistant Commissioner as per their jurisdiction; Above Rupees 1 crore but not exceeding Rs 5 crore Joint Commissioner(Executive)/Joint Commissioner (Corporate circle) as per their jurisdiction; Above Rs 5 crore Additional Commissioner Grade 1 3.2.2 Where during the course of Audit under section 65 or 66 of UPGST Act, 2017 it is noticed that any input tax credit has been fraudulently availed or is ineligible as per the grounds mentioned in sub-rule (1) of rule 86A, which may require disallowing debit of electronic credit ledger under rule 86A, the concerned Joint Commissioner of UPGST Audit may refer the same to the jurisdictional UPSGST Officer for examination of the matter for exercise of power under rul....
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....e, as per the conditions/grounds mentioned in sub-rule (1) of rule 86A. 3.3.3 The action by the Commissioner or the authorized officer, as the case may be, to disallow debit from electronic credit ledger of a registered person, is informed on the portal to the concerned registered person, along with the details of the officer who has disallowed such debit. 3.4 Allowing debit of disallowed/restricted credit under sub-rule (2) of Rule 86A: The Commissioner or the authorized officer, as the case may be, either on his own or based on the submissions made by the taxpayer with material evidence thereof, may examine the matter afresh and on being satisfied that the input tax credit, initially considered to be fraudulently availed or ineli....