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TMI BlogGuidelines for disallowing debit of electronic credit ledger under Rule 86A of the HGST Rules, 2017X X X X Extracts X X X X X X X X Extracts X X X X ..... quivalent to such credit in electronic credit ledger. 2. Doubts have been raised by the field formations on various issues pertaining to disallowing debit of input tax credit from electronic credit ledger, under Rule 86A of the Rules. Further, Hon'ble High Courts in some cases have emphasized the need for laying down guidelines for the purpose of invoking Rule 86A. In view of the above, the following guidelines are hereby issued with respect to exercise of power under Rule 86A of the Rules: 3.1 Grounds for disallowing debit of an amount from electronic credit ledger: 3.1.1 Rule 86A of the Rules is reproduced hereunder for reference: "86A. Conditions of use of amount available in electronic credit ledger.- (1) The Commissioner or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, upon being satisfied that conditions for disallowing debit of electronic credit ledger as above, no longer exist, allow such debit. (3) Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction." 3.1.2 Perusal of the rule makes it clear that the Commissioner, or an officer authorized by him, not below the rank of Excise and Taxation Officer of State Tax, must have "reasons to believe" that credit of input tax available in the electronic credit ledger is either ineligible or has been fraudulently availed by the registered person, before disallowing the debit of amount from electronic credit ledger of the said registered person under Rule 86A. The reasons for such b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a person is necessary for restricting him from utilizing/passing on fraudulently availed or ineligible input tax credit to protect the interest of revenue. 3.1.4 It is reiterated that the power of disallowing debit of amount from electronic credit ledger must not be exercised in a mechanical manner and careful examination of all the facts of the case is important to determine case(s) fit for exercising power under Rule 86A. The remedy of disallowing debit of amount from electronic credit ledger being, by its very nature. extraordinary, has to be resorted to with utmost circumspection and with maximum care and caution. it contemplates an objective determination based on intelligent care and evaluation as distinguished from a purely subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officers posted in the HGST - Intelligence Unit. Since these officers have jurisdiction all over the State of Haryana, they shall have powers to disallow debit of ITC from the electronic credit ledger of the registered person for any monetary lily it under intimation/approval from Additional Excise and Taxation Commissioner (GST). 3.2.3 The II0web system developed by GSTN does not allow blocking/un-blocking of Input Tax Credit by officers of the rank of Deputy Commissioner of State Tax and above. So in view of the same, the blocking of ITC in terms of provisions contained in Rule 86A shall be done by Excise and Taxation Officer of State Tax after taking due permission/approval from the officers as mentioned in para 3.2.1 above in writing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the conditions/ grounds mentioned in sub-rule (1) of rule 86A. 3.3.3 The action by the Commissioner or the authorized officer, as the case may be, to disallow debit from electronic credit ledger of a registered person, is informed on the portal to the concerned registered person, along with the details of the officer who has disallowed such debit. 3.4 Allowing debit of disallowed/restricted credit under sub-rule (2) of Rule 86A: 3.4.1 - The Commissioner or the authorized officer, as the case may be, either on his own or based on the submissions made by the taxpayer with material evidence thereof, may examine the matter afresh and on being satisfied that the input tax credit, initially considered to be fraudulently availed or inelig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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