SECTION 49 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017, READ WITH RULE 86A OF THE CENTRAL GOODS AND SERVICES TAX RULES, 2017 – PAYMENT OF TAX, INTEREST, PENALTY AND OTHER AMOUNTS – BLOCKING OF INPUT TAX CREDIT UNDER RULE 86A (1)(a)

CIRCULAR F. NO. 587/CE/167/POL/2019/11219-11269 DATED 13-1-2020

Attention is drawn to the provisions of Rule 86A(1)(a) of the Central Goods and Services Tax Rules, 2017 which empowers the CGST officers to block input tax credit (ITC) under certain circumstances.

1. All the Zonal Chief Commissioners have the facility to block/unblock ITC availed in a situation covered under Rule 86A(1)(a) of the CGST Rules, 2017 i.e. against fake invoices or against invoices without receipt of goods or services or both, if such availers of credit are located in their jurisdiction. To implement this provision, all the CGST Zones are required to make a list, GSTN-wise of fake credit availers and block their ITC under Rule 86A(1)(a) for the entities located in their jurisdiction. If, however, there are certain entities which are located outside their jurisdiction, they should forward a list of such availers along with GSTN No. to the local office of the Pr.ADG/ADG DGGI, with a request to block credit of such GSTN immediately.
2. To operationalize this scheme, it is requested that each Pr. Chief Commissioner/Chief Commissioner in its zone should appoint an officer of the rank of Dy. Commissioner/A.C, as a nodal officer, assisted by few more officers, who should undertake this activity. Similarly, all the 26 Pr.ADG/ADG, DGGI, spread all over India, should also make a Cell in their zone head office nominating one AD/DD rank officer as nodal officer assisted by a few other officers to block the credit of such availers received from their zonal CGST Chief Commissioner, who are located outside the jurisdiction of the concerned CGST Zone.
3. All Zonal Pr.CC/CC are requested to make the aforesaid list positively by 3 PM on 15-1-2020 and complete the credit blocking by 17th January, 2020 positively. Similarly, they should ensure that the list of outside availers is received by the concerned Pr. ADG/ADG DGGI positively by 15th January on which Pr. ADG/ADG DGGI should complete the action by 17th January, 2020. All Pr. ADG/ADG, DGGI should also undertake similar exercise for the cases booked by them and complete the same, latest by 17th January, 2020.
4. All the nodal officers, either of CGST Zones or ADG DGGI offices, are requested to get in touch with the Pr. DG Systems office and get the aforesaid facility of blocking ITC operational in their name immediately.
5. All the zonal Chief Commissioners and Zonal Pr. ADG/ADG, DGGI will submit a daily report to the Pr. DG, DGGI HQ, New Delhi in enclosed proforma at e-mail i.d. [email protected] and [email protected]
6. This issues with the approval of competent authority.

ANNEXURE A

For Credit availers in the jurisdiction of the same CGST Zone

Sl. No. Name of fake invoice issuer entities (GSTN wise) GSTN No. who have availed credit Amount of credit availed Amount of Credit blocked

1. 1.
   1. etc.
2. 1.
   1. 
      ANNEXURE B

For Credit availers outside the jurisdiction of the CGST Zone

Sl.No. Name of fake invoice issuer entities (GSTN wise) GSTN No. who have availed credit Amount of credit availed Amount of Credit blocked

1. 1.
   1. etc.