Important Keyword: Notification No. 75/2019 – Central Tax, Rule 36(4) 10% ITC, Rule 86A ITC block, Rule 138E E-Way Bill blocking, CGST Rules Amendment 2019, GST Return Filing Assam Manipur Tripura, GSTR-2A mismatch, GST compliance India
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Table of Contents
[F.No.20/06/09/2019-GST]
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
New Delhi, the 26th December, 2019
Notification No. 75/2019 – Central Tax: Seeks to carry out changes in the CGST Rules, 2017.
GST: [To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]
G.S.R…(E). - In exercise of the powers conferred by section 164 of the CGST Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following rules further to amend the Central Goods and Services Tax Rules, 2017, namely:-
1. (a). These rules may be called the Central Goods and Services Tax (Ninth Amendment) Rules, 2019.
(b) Save as otherwise provided, they shall come into force on the date of their publication in the Official Gazette.
2. In the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said rules), with effect from the 1st January, 2020, in rule 36, in sub-rule (4), for the figures and words “20 per cent.”, the figures and words “10 per cent.” shall be substituted.
3. In the said rules, after rule 86, the following rule shall be inserted, namely:-
“86A. Conditions of use of amount available in electronic credit ledger.-
(1) The Commissioner or an officer authorized by him in this behalf, not below the rank of an Assistant Commissioner, having reasons to believe that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible in as much as-
- the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36-
- issued by a registered person who has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or
- without receipt of goods or services or both; or
- the credit of input tax has been availed on the strength of tax invoices or debit notes or any other document prescribed under rule 36 in respect of any supply, the tax charged in respect of which has not been paid to the Government; or
- the registered person availing the credit of input tax has been found non-existent or not to be conducting any business from any place for which registration has been obtained; or
- the registered person availing any credit of input tax is not in possession of a tax invoice or debit note or any other document prescribed under rule 36,
may, for reasons to be recorded in writing, not allow debit of an amount equivalent to such credit in electronic credit ledger for discharge of any liability under section 49 or for claim of any refund of any unutilized amount.
(2). The Commissioner, or the officer authorized by him under sub-rule (1) may, upon being satisfied that conditions for disallowing debit of electronic credit ledger as above, no longer exist, allow such debit.
(3). Such restriction shall cease to have effect after the expiry of a period of one year from the date of imposing such restriction.”.
4. In the said rules, with effect from the 11th January, 2020, in rule 138E, after clause (b), the following clause shall be inserted, namely:-
“(c) being a person other than a person specified in clause (a), has not furnished the statement of outward supplies for any two months or quarters, as the case may be.”.
(Ruchi Bisht)
Under Secretary to the
Government of India
Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification No. 3/2017-Central Tax, dated the 19th June, 2017, published vide number G.S.R. 610(E), dated the 19th June, 2017 and last amended vide notification No. 68/2019 - Central Tax, dated the 13th December, 2019, published vide number G.S.R. 924(E), dated the 13th December, 2019.
📚 Frequently Asked Questions (FAQs): Notification No. 75/2019 – Central Tax
Q1: What is Notification No. 75/2019 – Central Tax about?
Answer:
It amends CGST Rules 2017 — mainly related to Input Tax Credit restrictions, fraud control, and E-Way Bill compliance.
Q2: What change happened in Rule 36(4)?
Answer:
Only 10% additional ITC can be claimed over invoices appearing in GSTR-2A / 2B (earlier 20%).
Example 👉 If vendor-uploaded invoices: ₹1,00,000 ITC → You can claim only ₹1,10,000 total.
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➡ File accurately with Finodha GST Return Filing: https://finodha.in/gst-return-filing/
Q3: From when is this 10% ITC restriction applicable?
Answer:
Applicable 01 January 2020 onwards.
Q4: What is new Rule 86A?
Answer:
Rule 86A empowers GST officers to block your Electronic Credit Ledger if ITC is suspected to be fraud or ineligible.
Q5: When can the department block ITC under Rule 86A?
Answer:
If:
Vendor is non-existent
Goods/services not actually received
Tax not paid to Govt.
No valid invoice possession
Q6: For how long can ITC remain blocked under Rule 86A?
Answer:
Restriction automatically lifts after 1 year, unless removed earlier.
Q7: What change is made in Rule 138E (E-Way Bill)?
Answer:
E-Way Bill is blocked if GSTR-1 not filed for 2 consecutive periods.
✔ To avoid blocking ➝ GST Compliance with Finodha: https://finodha.in/gst-compliance/
Q8: What if ITC is blocked but later found valid?
Answer:
Officer may reactivate ITC ledger upon satisfaction.
Q9: Does Notification No. 75/2019 apply to all taxpayers?
Answer:
Yes — applies universally to all registered persons taking ITC.
Q10: Is Rule 86A applicable to refunds also?
Answer:
Yes — If ledger is blocked, refund claims cannot be processed.
Q11: How does this affect small businesses?
Answer:
They must ensure:
📌 Vendor compliance
📌 Invoice reconciliation monthly
Otherwise ITC becomes risky ❌
Q12: What documents must be kept to avoid ITC block?
Answer:
Original tax invoice
Proof of receipt (E-Way bill, Delivery challan)
Vendor GST return compliance proof
Q13: Will GSTR-2A/2B matching become compulsory?
Answer:
Yes — mismatch beyond 10% can be rejected by the portal.
Q14: What businesses are most affected?
Answer:
Trading & manufacturing where vendor compliance is critical.
Q15: Who can issue orders under Rule 86A?
Answer:
Only Assistant Commissioner or above rank officers.
🚀 Conclusion
This notification tightens ITC rules and enforces vendor compliance.
Businesses must regularly reconcile GSTR-2B vs books or lose ITC temporarily.
👉 Stay 100% compliant with Finodha Experts:
GST Filing & Reconciliation ➝ https://finodha.in/gst-return-filing/
💡 Book a consultation before GST department blocks your ITC!
Download PDF: Notification No. 75/2019 – Central Tax
More Information: https://taxinformation.cbic.gov.in/
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