Notice to State & Center Due to ITC Blocking Under GST Rule 86A

Beneath Rule 86A Gujarat High Court announced the reports to the Central and State over blocking of Input Tax Credit (ITC).

The petitioner, Surat Mercantile Association has furnished the application where it is written that challenges the constitutional validity and vires of Rule 86A of the Central GST Rules Get the brief introduction of SGST, IGST and CGST. We have mentioned their full forms, meanings and adjustments of input tax credit under GST in India and the Gujarat GST Rules.

The GST officer has the power to block input tax credit without any intimation or without giving any prior information to the taxpayer as per the Rule 86A.

The electronic cash ledger of the buyers of goods and services Get to know GST provisions and rules on the free supply of goods. Also, we have included rules regarding ITC reversal on free supplies of goods and services of genuine businesses gets restricted despite it having no-fault. While the counsel of the petitioner states that rule 86A is not fair as per the natural justice.

“Rule 86A of the Rules is a draconian, arbitrary, irrational, and unduly harsh provision and therefore violative of Article 14 of the Constitution of India. Rule 86A of the Rules ultra virus the Section 74 of the Act in as much as Section 74 of the Act mandates issue of show cause notice for demand of ineligible or fraudulently availed input tax credit,”

It was additionally proposed that Rule 86A of the Customs including ultra-virus Section 75(4) of the Act which makes it important to allow the opportunity of listening in which any unfavorable judgment is seen upon the assessee. The rule 86A can be relaxed if the taxpayer pays 10% of the tax before any listening. The two judges directed by Chief Justice Vikram Nath and Justice J.B. Pardiwala published a notice to the Central and State Government to relinquish its answer on 21st January 2021.