The said Rules have laid out new rule restricting the use of ITC for discharging the Output Tax liability. It has also amended the Rule 36(4).
Highlight of Fourteenth Amendment Rules, 2020 are:
The taxpayer has to mandatorily pay at least 1% of his liability through cash ledger if monthly taxable supply (other than exempt supply and zero-rated supply) exceeds 50 Lakhs.
In other words, the registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of ninety-nine per cent.
It may be pertinent to note that Rule 86B doesn’t applies to Govt. Department, PSU, Local Authority, Statutory Body, on registered person who had deposited more than Rs 1 lakh rupees as income tax under the Income-tax Act, 1961 in each of the last two financial years; registered person who has received a refund more than Rs 1 lakh rupees in the preceding financial year on account of export under LuT or inverted tax structure; cumulatively upto the said month in the current financial year; registered person has discharged his output tax liability in cash which is in excess of 1% of the total output tax liability.
The period of validity of e-way bills under Rule 138 has been amended (w.e.f January 2021) and e-way bill generation shall be restricted under Rule 138E during the period of suspension of registration under Rule 21A.