Kabira Industries (a proprietorship concern registered under GST) trades in taxable goods. Details for the month of July 2025 are as follows: Sr.…

Computation of GST on outward supplies Particulars Amount (₹) GST on outward taxable supplies for July 2025 9,54,000 [53,00,000 x 18%] Computation of amount available in electronic credit ledger Opening balance available in electronic credit ledger 1,12,500 ITC on total inward supplies [₹ 48,00,000 x 18%] 8,64,000 Total amount available in electronic credit ledger 9,76,500 It is important to note that where value of taxable supply of a registered person in a month exceeds 50lakh, he cannot use the amount available in its electronic credit ledger to discharge the output tax liability beyond 99% of output tax liability. Above restriction is not applicable subject to specified exceptions. However, in the given case, these exceptions will not be applicable since: (1) income tax paid in one of the last 2 financial years is not more than 1lakh. (2) ITC refund on exports made without payment of tax in preceding financial year is not more than 1lakh. (3) amount of output tax liability discharged in cash till June = 13,000 [₹ 4,500 (₹ 5,500 -1,000) +4,500 (5, 000-500) +4,000] 1% of total output tax liability, applied cumulatively, upto July month in the current financial year = 20,540 [₹ 20,54,000 (3,60,000+3,20,000+4,20,000+9,54,000) × 1%] Thus, amount of output tax liability discharged in cash does not exceed 1% of the total output tax liability, applied cumulatively, upto the said month in the current financial year. Hence, rule 86B will be applicable in given case since such exceptions are not applicable in the given case: Accordingly, for the month of July 2025: (i) Maximum input tax credit (ITC) that can be utilized for payment of GST = 9,44,460 [9,54,000 x 99%] (ii) Net GST liability to be paid through electronic cash ledger = 9,540 [9,54,000 x 1%]