This post is for you if your client's Electronic Credit Ledger is blocked or debited under Rule 86A.
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Research by: Abhishek Raja Ram; 9810638155
1. It is not permissible to block Electronic Credit Ledger, resulting in a negative balance.
Karuna Rajendra Ringshia - Delhi High Court
(2024) 24 CENTAX 259
2. Rule 86A is not a machinery provision for recovering tax or dues but an emergent measure for protecting revenue by temporarily not allowing debit of available ITC in ECL order. Disallowing debit from ECL in excess of ITC available in ECL at the time of passing order was to be set aside.
Best Corp Science Pvt. Ltd. - Delhi High Court
(2024) 22 CENTAX 531
3. Blocking of Input Tax Credit (ITC) under Rule 86A without indicating proper satisfaction and before expiry of time granted for document production necessitates expeditious disposal of unblocking application with opportunity of hearing.
Sugandha Metal Industries Pvt. Ltd. - Allahabad High Court
(2024) 24 CENTAX 194
4. Where electronic credit ledger of assessee was blocked by invoking Rule 86A of CGST Rules, impugned order did not contain independent or cogent reasons to believe except that registered person/ supplier found to be non-existent or not to be conducting any business from registered place, impugned order was to be set aside.
Lead Factory - Karnataka High Court
(2024) 23 CENTAX 334
5. Credit in Electronic Credit Ledger cannot be blocked if sufficient balance is not available.
PMW Metal & Alloys Pvt. Ltd. - (2024) 23 CENTAX 317
I hope you will find this post useful.
Warm Regards,
Abhishek Raja Ram
9810638155