Rule 86B

To curb tax evasion government added a new rule 86B in the GST rule.

1. VINOD K AGRAWAL & ASSOCIATES, CA
VISIT OUR SITE FOR MORE DETAILS: https://cavkagrawal.business.site/ Page 1

RULE 86B
[INTRODUCTION OF NEW RULE IN GST]

The Center has made a new rule for those doing business of more than 50 lakh rupees
every month.

Monthly merchants with more than
50 lakh turnovers will have to deposit
1 percent of the GST in cash. With
this, traders have been allowed to
deposit 99 percent tax (TAX) as
before.

The central government has
changed the rules to prevent fraud
through GST. According to the
Finance Ministry, this step has been
taken to prevent tax evasion through
fake invoices. According to this rule,
now merchants with monthly turnover of more than 50 lakhs will have to deposit 1
percent cash in GST. Along with this, traders have been allowed to pay 99 percent tax
using input tax credit as before.

86B rule added to GST rules –

• According to the Central Board of Indirect Taxes and Customs (CBIC), Rule 86B has been
added to the GST rules to prevent fraud.

• This rule allows up to 99 per cent of GST liability to be paid using input tax credit.

• CBIC said that if the value of taxable supply exceeds Rs 50 lakh in a month, no registered
person can use the amount available in the electronic credit ledger to meet the tax liability of
more than 99 per cent.

2. VINOD K AGRAWAL & ASSOCIATES, CA
VISIT OUR SITE FOR MORE DETAILS: https://cavkagrawal.business.site/ Page 2


Law will not be applicable in these cases-

• According to CBIC, this change made in the rules of GST will not be applicable to those
businessmen.

• Where the managing director or partner of the company has deposited more than Rs 1 lakh as
income tax.

• In addition, this rule will also not be applicable in case of input tax credit refund of more than
Rs 1 lakh to the GST registered person in the last year.

These things will not be included in the calculation of turnover -

• CBIC has said that while calculating the limit of turnover, the goods which do not come under
the purview of GST and supplies with zero tax rate will not be included.

• Professionals say that the government has limited the payment of tax liability to 99 per cent
through an input tax credit on businesses with a turnover of more than Rs 50 lakh per month
from Rule 89B.


The purpose of this new rule is to prevent companies from misusing ITC through
fake bills.
Tax ban will be stopped now!