GST update: Restrictions on use of amount available in electronic credit ledger.

Central Board of Indirect Taxes and Customs has issued Notification No. 94/2020 – Central Tax dated December 22, 2020, regarding amendments in CGST Rules,2017.

Restrictions on use of amount available in electronic credit ledger

Where the value of taxable supply other than exempt supply and zero-rated supply, in a month exceeds fifty lakh rupees, the registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of ninety-nine per cent. of such tax liability.

Such restriction is not applicable in following cases:

(i) Where the taxpayer has paid Income Tax exceeding Rs. 1 lakh in two preceding financial year.

(ii) Where taxpayer has received refund exceeding Rs. 1 lakhs on account of inverted duty structure or zero-rated supplies without payment of tax in the preceding financial year.

(iii) Where taxpayer has used electronic cash ledger to pay of liability on outward supplies which cumulatively makes 1% of the total liability up to the said month in the current financial year.

(iv) Where a person is a Government Department, Public Sector Undertaking (PSU), local authority or a statutory body.

This rule would come into force from 1^st January 2021.

SOURCE : CBIC NOTIFICATIONs

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