The finance ministry has asked businesses with a monthly turnover of over Rs 50 lakh to mandatorily pay at least 1 per cent of their GST liability in cash as the Centre moves to check fake invoicing.

The Central Board of Indirect Taxes and Customs (CBIC) has introduced Rule 86B in Goods and Services Tax (GST) rules which restricts the use of input tax credit (ITC) for discharging GST liability to 99 per cent.

“The registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of 99 per cent of tax liability, in cases where the value of taxable supply ... in a month exceeds Rs 50 lakh,” the CBIC said.

While calculating the turnover threshold, sales from GST exempt goods and zero rates supply would not be included.

However, this restriction will not apply where the managing director or any partner have paid more than Rs 1 lakh as income tax or the registered person has received a refund amount of more than Rs 1 lakh in the preceding financial year on account of unutilised input tax credit.

GSTR-1 curbs

Further, the Central Board of Indirect Taxes and Customs (CBIC) has amended the GST rules restricting the filing of outward supply details in GSTR-1 for businesses that have not paid tax for the past periods by filing GSTR 3B.

So far, until now, non-filing of GSTR 3B resulted in blockage of e-way bill but will now result in GSTR 1 blockage as well.