CBIC introduced new Rule 86B via notification number 94/2020 to limit the use of ITC balance while paying the output tax liability.
The CGST rule 86B applies to registered persons with a taxable value of supply (other than exempt supply and zero-rated supply) in a month more than Rs.50 lakh. This rule is made effective from 1st January 2021.
The applicable registered persons cannot use ITC in excess of 99% of output tax liability. The remaining 1% of tax liability should be discharged by making payment in cash.
This video also explains the impact of rule 86B on businesses and working capital.
26 май 2022
