{"id":9109,"date":"2026-01-31T04:50:30","date_gmt":"2026-01-31T04:50:30","guid":{"rendered":"https:\/\/margbooks.com\/blogs\/?p=9109"},"modified":"2026-01-31T04:57:24","modified_gmt":"2026-01-31T04:57:24","slug":"difference-between-rule-86b-and-rule-86a-of-cgst-rules","status":"publish","type":"post","link":"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/","title":{"rendered":"What Is the Difference Between Rule 86B and Rule 86A of CGST Rules?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69_1 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #1c6e70;color:#1c6e70\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #1c6e70;color:#1c6e70\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/#Understanding_Rule_86A_of_CGST_Rules\" title=\"Understanding Rule 86A of CGST Rules\">Understanding Rule 86A of CGST Rules<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/#When_Rule_86A_of_CGST_Rules_is_Invoked\" title=\"When Rule 86A of CGST Rules is Invoked?\">When Rule 86A of CGST Rules is Invoked?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/#Authority_and_Duration_Under_Rule_86A\" title=\"Authority and Duration Under Rule 86A\">Authority and Duration Under Rule 86A<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/#Practical_Impact_on_Businesses\" title=\"Practical Impact on Businesses\">Practical Impact on Businesses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/#What_is_Rule_86B_of_CGST_Rules\" title=\"What is Rule 86B of CGST Rules?\">What is Rule 86B of CGST Rules?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/#Applicability_of_Rule_86B\" title=\"Applicability of Rule 86B\">Applicability of Rule 86B<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/#Exemptions_Provided_Under_Rule_86B\" title=\"Exemptions Provided Under Rule 86B\">Exemptions Provided Under Rule 86B<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/#Intent_Behind_Rule_86B\" title=\"Intent Behind Rule 86B\">Intent Behind Rule 86B<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/#Higher_Compliance_Attention\" title=\"Higher Compliance Attention\">Higher Compliance Attention<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/margbooks.com\/blogs\/difference-between-rule-86b-and-rule-86a-of-cgst-rules\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>Input Tax Credit abuse is a key topic with respect to GST. Two such provisions are often misunderstood, i.e., Rule 86A of CGST Rules and Rule 86B of CGST Rules. The government came up with some specific controls to discourage the fraudulent use of credit leaving aside the real flow of business. Both impact on the Input Tax Credit but have very different operating mechanism. One denies credit in suspicious cases.&nbsp;<\/p>\n\n\n\n<p>The other are limits the use of credit for high-value taxpayers. Businesses, accountants and consultants all need to know where each of the rules seems to apply and how compliance is affected. Incorrect interpretation causes blocked credit, cash flow stress and litigation. This article makes the two rules easy to understand with Indian actual business context and implications.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Understanding_Rule_86A_of_CGST_Rules\"><\/span>Understanding Rule 86A of CGST Rules<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Rule 86A of CGST Rules has provided powers to the GST officer to block Input Tax Credit that exists in the electronic credit ledger. The action is preventative in nature. It applies where the said officer is of the opinion that availing of credit was done fraudulently or is not eligible. rule 86a of cgst rules does not require giving prior notice. The restriction can be made immediately.<\/p>\n\n\n\n<div class=\"btn-div\">\n\n    <a href=\"https:\/\/me9.in\/MBB\" class=\"marg-btn\" target=\"_blank\" rel=\"noopener\">Get Cloud-Based GST Billing Software<\/a>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_Rule_86A_of_CGST_Rules_is_Invoked\"><\/span>When Rule 86A of CGST Rules is Invoked?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Credit may be blocked in the event of ITC being associated with:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Fake invoices without supply of goods or services<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Invoices with non-existent suppliers<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Not paid tax by the government<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recipient does not have valid tax invoice<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Supplier registration retrospectively cancelled.<\/li>\n<\/ul>\n\n\n\n<p>The officer is required to have to record reasons in writing before blocking the credit.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Authority_and_Duration_Under_Rule_86A\"><\/span>Authority and Duration Under Rule 86A<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The power is in the hands of an officer of the rank of Assistant Commissioner or below. This restriction is valid until a year. Earlier unblocking is possible when conditions are true.<\/p>\n\n\n\n<p>This provision impacts directly on working capital. Many Indian traders using <a href=\"https:\/\/margbooks.com\/accounting-software.html\">accounting software<\/a> are at a loss with blocked credit without any notice. Platforms such as MargBooks help to keep trails of the invoices and reconciliation data, which helps to support representation to authorities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Practical_Impact_on_Businesses\"><\/span>Practical Impact on Businesses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Blocked credit cannot be used for paying of Tax. Cash outflow increases immediately. Businesses involved in trading, construction and manufacturing are the most affected. Key implications include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Upfront payment of GST in the form of cash<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Credibility of vendors becoming critical<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Increased scrutiny during the auditing process<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Added compliance documentation<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"900\" height=\"490\" src=\"https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/360_F_1680894953_wWwTNrc2cZb45ABZWFRFUdThXq1Hmkbg.jpg\" alt=\"Rule 86B of CGST Rules\" class=\"wp-image-9112\" title=\"\" srcset=\"https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/360_F_1680894953_wWwTNrc2cZb45ABZWFRFUdThXq1Hmkbg.jpg 900w, https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/360_F_1680894953_wWwTNrc2cZb45ABZWFRFUdThXq1Hmkbg-300x163.jpg 300w, https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/360_F_1680894953_wWwTNrc2cZb45ABZWFRFUdThXq1Hmkbg-768x418.jpg 768w, https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/360_F_1680894953_wWwTNrc2cZb45ABZWFRFUdThXq1Hmkbg-150x82.jpg 150w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Rule_86B_of_CGST_Rules\"><\/span>What is Rule 86B of CGST Rules?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The rule 86B of cgst rules limits the use of Input Tax Credit for discharging the output tax liability. This requires a minimum payment in cash for some taxpayers. rule 86a of cgst rules does not prevent the provision of credit. It only limits its usage.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Applicability_of_Rule_86B\"><\/span>Applicability of Rule 86B<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Rule 86B applies when:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Monthly turnover \u20b950 lakh.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Exemptions do not apply.<\/li>\n<\/ul>\n\n\n\n<p>The registered person has to pay a minimum of 1 percent of the liability of output tax in cash.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemptions_Provided_Under_Rule_86B\"><\/span>Exemptions Provided Under Rule 86B<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The rule does not apply when:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Income tax paid is above specified limits<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Refund located on account of exports<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Government departments are involved, and PSUs are involved.<\/li>\n<\/ul>\n\n\n\n<p>Businesses that make use of <a href=\"https:\/\/margbooks.com\/gst-billing-software.html\">GST billing software<\/a> with cash flow tracking methods are able to plan tax payments better. MargBooks supports turnover alerts and visibility of GST liabilities reducing last minute pressure towards compliance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Intent_Behind_Rule_86B\"><\/span>Intent Behind Rule 86B<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The reason for that is to ensure a minimum cash contribution to the collection of GST. It aims at entities having a high rate of turnover and little payment in the form of taxes. It is a system of control mechanism instead of a punitive mechanism. Regularly, our MargBooks software users handle Rule 86B compliance quite simply with structured reporting and Tax planning dashboards.<\/p>\n\n\n\n<div class=\"btn-div\">\n\n    <a href=\"https:\/\/me9.in\/MBB\" class=\"marg-btn\" target=\"_blank\" rel=\"noopener\">Get Online Accounting Software<\/a>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Higher_Compliance_Attention\"><\/span>Higher Compliance Attention<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The rule 86A of CGST rules increased requirement of verification from vendors. Businesses need to ensure legitimacy of suppliers, payment of taxes and authenticity of invoices. So cash flow planning is required under Rule 86B. It is not a question of the validity of the credit.<\/p>\n\n\n\n<p>Both these rules have different objectives. Confusing one with the other creates wrong compliance strategies. Our MargBooks software can help finance teams with vendor reconciliation and GST summaries thereby reducing exposure based on both these rules.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Understanding the difference between Rule 86A of CGST Rules and Rule 86B are very important for the businesses in India. One is a fraud prevention utility. The other is one of revenue assurance measures. Rule 86A obstructs any credit that is based on officer assessment. Rule 86B ensures minimum cash payment through the system controls.&nbsp;<\/p>\n\n\n\n<p>Both have different impacts on liquidity. Proper documentation, supplier checks and tax planning under <a href=\"https:\/\/margbooks.com\/\">MargBooks software<\/a> in structure minimize the risk. Businesses that are dependent on accurate records and timely reconciliation always keep prepared. Awareness about Rule 86A of CGST rules to have an informed response and a better compliance result in the ambit of GST<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Input Tax Credit abuse is a key topic with respect to GST. Two such provisions are often misunderstood, i.e., Rule 86A of CGST Rules and Rule 86B of CGST Rules. The government came up with some specific controls to discourage the fraudulent use of credit leaving aside the real flow of business. Both impact on [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":9110,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[38],"tags":[2516,57,86],"class_list":["post-9109","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","tag-cgst","tag-cloud-based-accounting-software","tag-gst-billing-software"],"blocksy_meta":[],"blog_post_layout_featured_media_urls":{"thumbnail":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/GST-Rules-1-150x150.webp",150,150,true],"full":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/GST-Rules-1.webp",1200,576,false]},"categories_names":{"38":{"name":"GST","link":"https:\/\/margbooks.com\/blogs\/category\/gst\/"}},"tags_names":{"2516":{"name":"CGST","link":"https:\/\/margbooks.com\/blogs\/tag\/cgst\/"},"57":{"name":"cloud based accounting software","link":"https:\/\/margbooks.com\/blogs\/tag\/cloud-based-accounting-software\/"},"86":{"name":"gst billing software","link":"https:\/\/margbooks.com\/blogs\/tag\/gst-billing-software\/"}},"comments_number":"0","wpmagazine_modules_lite_featured_media_urls":{"thumbnail":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/GST-Rules-1-150x150.webp",150,150,true],"cvmm-medium":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/GST-Rules-1-300x300.webp",300,300,true],"cvmm-medium-plus":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/GST-Rules-1-305x207.webp",305,207,true],"cvmm-portrait":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/GST-Rules-1-400x576.webp",400,576,true],"cvmm-medium-square":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/GST-Rules-1-600x576.webp",600,576,true],"cvmm-large":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/GST-Rules-1-1024x576.webp",1024,576,true],"cvmm-small":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/GST-Rules-1-130x95.webp",130,95,true],"full":["https:\/\/margbooks.com\/blogs\/wp-content\/uploads\/2026\/01\/GST-Rules-1.webp",1200,576,false]},"_links":{"self":[{"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/posts\/9109","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/comments?post=9109"}],"version-history":[{"count":2,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/posts\/9109\/revisions"}],"predecessor-version":[{"id":9113,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/posts\/9109\/revisions\/9113"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/media\/9110"}],"wp:attachment":[{"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/media?parent=9109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/categories?post=9109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/margbooks.com\/blogs\/wp-json\/wp\/v2\/tags?post=9109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}