CGST ITC Rules Master Class: Rules 36, 37, 42, 86A & 86B Explained
CGST ITC Rules Master Class: Rules 36, 37, 42, 86A & 86B Explained
Comprehensive statutory cheat sheet for GST rules governing Input Tax Credit claims, unpaid supplier reversals, exempt reversals, and credit ledger restrictions.
Who is this for: CGST Rules & Compliance
Quick Answer: What are the Core CGST Rules Governing Input Tax Credit?
CGST ITC Rules enforce strict compliance: Rule 36 requires invoice details in GSTR-2B; Rule 37 mandates 180-day payment reversal with 18% interest; Rule 42 covers exempt supply reversals; Rule 86A empowers credit ledger blocking; and Rule 86B mandates 1% cash liability payment for turnover over Rs 50 Lakh/month.
- Rule 37 requires ITC reversal + 18% interest if supplier is unpaid past 180 days.
- Rule 86B mandates 1% cash tax payment for monthly taxable sales over Rs 50 Lakhs.
- Rule 42 calculates proportionate ITC reversal for common inputs used in exempt sales.
- TallyPrime tracks unpaid bills past 180 days for automated Rule 37 statutory journal entries.
1. Master Summary Table of CGST ITC Rules
| Rule | Mandate & Conditions | Action Required in GSTR-3B |
|---|---|---|
| Rule 37 | Non-payment to supplier within 180 days from invoice date. | Reverse ITC in Table 4B(2) + pay 18% interest p.a. |
| Rule 86B | Monthly taxable sales > Rs 50 Lakhs requires 1% cash payment. | Pay minimum 1% output tax liability via Cash Ledger. |
Automate Purchase Ledger Entry to Tally Prime
Stop manual data entry. Extract digital PDFs, scanned bills, and WhatsApp photos with TrulyInvoice AI directly to Tally Prime in 15 seconds.
Automate Tally Purchase Entry Free →Founder & Chief Architect of TrulyInvoice