Rule 86A: blocking of the electronic credit ledger
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Updated 03 Oct 2026
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AI summary
When the department can block your ITC, and what to do about it.
3 sections 4 steps
What it is
An officer (Commissioner or authorised officer) can block part of the ITC in your electronic credit ledger if there are reasons to believe it was availed fraudulently or wrongly, for example:
- invoices from suppliers who don't exist or don't operate from the declared address,
- ITC on invoices without actual receipt of goods or services,
- supplier hasn't paid the tax charged.
Effect
The blocked amount can't be used to pay tax or be refunded. The block lasts up to one year, unless removed earlier.
What to do
- Check the notice on the portal: amount, invoices and reason.
- Gather proof: e-way bills, transport documents, goods receipt notes, payment through banking channels, supplier's registration details.
- Write to the officer with the evidence and request unblocking.
- Meanwhile, pay output tax in cash if needed to avoid interest.
Prevention: check each supplier's GSTIN status and filing history before buying, and never accept invoices without actual supply.
Sources
PreviousRule 38: ITC option for banks and financial institutions Next in Input Tax Credit GSTR-2B reconciliation and ITC mismatches
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