Negative ITC Blocking Invalid as Rule 86A Applies Only to Available Credit: P&H HC

Sonalika Enterprises Vs State of Haryana and Others (Punjab and Haryana High Court) The case concerns the scope and limits of powers under Rule 86A of the Central Goods and Services Tax Rules, 2017, particularly whether authorities can block Input Tax Credit (ITC) in excess of the balance available in a taxpayer’s Electronic Credit Ledger (ECL) and create a negative balance. The petitioner, a registered dealer under the Haryana Goods and Services Tax Act, challenged the action of the authorities in blocking ITC through an entry dated 02.12.2024. It was contended that the respondents, without...