Bombay HC Reiterates Bar on Negative ITC Blocking under Rule 86A

Dhairya Trade Link Vs Deputy Commissioner of State Tax And Ors. (Bombay High Court)

In a recent matter before the Hon’ble Bombay High Court, a significant ruling was delivered on the issue of negative blocking of Input Tax Credit (ITC) under Rule 86A of the CGST Rules. The petitioner, represented by Advocate Sachin Kumar, challenged the action of the tax authorities who had blocked ITC in excess of the balance available in the taxpayer’s electronic credit ledger.

The core question before the Court was whether the department is empowered to block ITC beyond the amount act

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