Rule 86B of CGST Rules limiting discharge of Output Tax Liability through ITC in Electronic Credit Ledger Ultra Vires HPGST Act: Himachal Pradesh HC

The Himachal Pradesh High Court ruled that Rule 86B of the CGST Rules, which limits the discharge of output tax liability through input tax credit (ITC) in the electronic credit ledger, is ultra vires the Himachal Pradesh GST Act. The court found that the rule restricts the use of ITC beyond what is permitted under the state’s GST Act, effectively exceeding its legislative authority. The decision highlights the importance of aligning GST rules with state laws and ensuring they do not exceed their statutory mandate.