Pratap 16MM

Wednesday, January 27, 2021

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High Court notice to Centre, GST Council

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A bench of Gujarat High Court comprising Justices J B Pardiwala and I J Vora has issued notices to the Central government, the GST Council and the Attorney General of India among others in response to a petition challenging the constitutional validity of a rule recently brought by the government. The court will conduct further hearing on February 24.

Advocate Avinash Poddar, counsel for Surat-based chartered accountant firm AAP & Co said, "We have challenged the Rule 86B of CGST Rules, 2017 that was inserted by issuing a notification on December 22 last. This rule restricts a taxpayer in using his credit available in the electronic credit ledger to discharge the liability towards output tax to the extent of 1% of the total tax liability. This restriction is not in line with the law."

We have challenged the Rule 86B of CGST Rules, 2017 that was inserted by issuing a notification on Dec 22 last. This rule restricts ataxpayer to use credit available in the electronic credit ledger

Avinash Poddar, counsel

Explaining its effect, the counsel said, "This rule obligates the taxpayer to pay an extra amount towards his tax liability through his electronic cash ledger, even though sufficient credit is available in the electronic credit ledger which can be used towards discharging the output tax liability as per the provisions of law. Prior to insertion of the rule 86B, a taxpayer was allowed to utilize the amount available in the electronic credit ledger for making payment towards the output tax liability under CGST Act or IGST Act."