New sets of amendments and additions have recently been introduced in existing Goods and Services Tax provisions via the Fourteenth GST Amendment Rules, 2020. This article focuses on one such crucial rule inserted relating to input tax credit with effect from Jan. 

A new rule 86B has been inserted, requiring a certain unique segment of taxpayers to compulsorily discharge at least 1% of their output GST liability in cash.

Typically, the fraudsters tend to illicitly discharge the entire GST liability through ITC available, thus avoiding cash payments. With this restriction, it appears that yet another check to trace fraudulent taxpayers has been introduced by lawmakers considering the increase in daily fake invoicing spams. In a way, this shall ensure curbing mala fide acts and plug revenue leakages in the governmen

While this compulsory requirement of discharging GST liability of at least 1% through cash appears to be harsh during this time of the pandemic, minute analysis of these provisions gives a different perspective altogether in the form of exclusions outlined below from these strident compliances.

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