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What is the Rule 86A. Conditions of use of amount available in electronic credit ledger.

keshavamurthy mb (152 Points)

07 January 2025

what is the Rule 86A. Conditions of use of amount available in electronic credit ledger.

Please suggest me how to Reply to the Gst Notice Rule 86A of Cgst Act 2017 And give me Any Draft format Relevant to the Notice.

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (5870 Points)
Replied 08 January 2025

Rule 86A of the CGST Act, 2017, deals with the conditions for using the amount available in the electronic credit ledger.

The rule states that the amount available in the electronic credit ledger can be used for making payments towards output tax liability only if:

1. The credit has been utilized only for payment of output tax liability and not for payment of interest, penalty, or any other amount.

2. The credit has been utilized only for payment of output tax liability in the same State or Union Territory. If a taxpayer fails to comply with these conditions, the proper officer may issue a notice under Rule 86A, requiring the taxpayer to:

1. Reverse the credit utilized in contravention of the rule.

2. Pay the amount of credit utilized in contravention of the rule, along with interest and penalty as applicable.

Here's a draft reply format to the GST notice under Rule 86A:

Reply to GST Notice under Rule 86A of CGST Act, 2017 [Your Name] [Your GSTIN] [Your Address] [City, State, Pincode] [Email ID] [Phone Number] [Date] The Proper Officer, [Office Address] [City, State, Pincode] Subject: Reply to Notice under Rule 86A of CGST Act, 2017 Dear Sir/Madam, Re: GSTIN [Your GSTIN], Notice No. [Notice Number] dated [Notice Date] We refer to the notice issued under Rule 86A of the CGST Act, 2017, alleging that our firm has utilized the amount available in the electronic credit ledger in contravention of the said rule. We deny the allegations made in the notice and submit that: [Provide detailed explanation and supporting documents to justify the utilization of credit] We request you to: [Specify the relief sought, e.g., withdrawal of the notice, permission to utilize the credit, etc.] We assure you that we have complied with the provisions of the CGST Act, 2017, and the rules made thereunder. Please find attached the following documents: [List the supporting documents attached] Thank you for your attention to this matter. Yours faithfully, [Your Signature] [Your Name] [Your Designation] [Your GSTIN]

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