Petitioner’s electronic credit ledger cannot be blocked for any period in excess of one year, in view of express provision contained in Sub-Rule (3) of Rule 86(A) of C.G.S.T. Rules.
Rule 86(A)(1) of CGST Rules, 2017— Blocking of ITC ----- The petitioner’s ITC available was provisionally blocked on 15.01.2020 under Rule 86(A)(1) of Rules, 2017 on the ground that petitioner had availed ITC based on fake invoices issued by non-existing firms. The petitioner prayed for directions to the respondent to unblock the ITC. The petitioner counsel submitted that the outer limit for disallowing debit of electronic credit ledger is one year, since the input tax credit ledger of the petitioner was blocked on 15.01.2020, therefore, in view of Sub-Rule 3 of Rule 86(A) of the Rules, the period of one year expired on 14.01.2021, consequently, continuance of blockage of petitioner’s input tax credit ledger after 14.01.2021 is not supported by law. The respondent counsel conceded that petitioner’s electronic credit ledger cannot be blocked for any period in excess of one year.
Held that—the Hon’ble High Court directed Respondent to forthwith unblock input tax credit availed by the petitioner in its electronic credit ledger.
Petitioner’s electronic credit ledger cannot be blocked for any period in excess of one year, in view of express provision contained in Sub-Rule (3) of Rule 86(A) of C.G.S.T. Rules.
Rule 86(A)(1) of CGST Rules, 2017— Blocking of ITC ----- The petitioner’s ITC available was provisionally blocked on 15.01.2020 under Rule 86(A)(1) of Rules, 2017 on the ground that petitioner had availed ITC based on fake invoices issued by non-existing firms. The petitioner prayed for directions to the respondent to unblock the ITC. The petitioner counsel submitted that the outer limit for disallowing debit of electronic credit ledger is one year, since the input tax credit ledger of the petitioner was blocked on 15.01.2020, therefore, in view of Sub-Rule 3 of Rule 86(A) of the Rules, the period of one year expired on 14.01.2021, consequently, continuance of blockage of petitioner’s input tax credit ledger after 14.01.2021 is not supported by law. The respondent counsel conceded that petitioner’s electronic credit ledger cannot be blocked for any period in excess of one year.
Held that—the Hon’ble High Court directed Respondent to forthwith unblock input tax credit availed by the petitioner in its electronic credit ledger.