CBIC issues Circular on Recovery of Arrears of wrongly availed CENVAT Credit under the existing law and inadmissible Transitional Credit

Sep 05, 2018 | by Avantis RegTech Legal Research Team


The Central Board of Indirect Taxes and Customs (CBIC) has received various representations seeking clarification on the process of recovery of arrears of wrongly availed CENVAT credit under the existing law and CENVAT credit wrongly carried forward as transitional credit in the GST regime. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the CBIC, has clarified that vide Circular No. 42/16/2018-GST dated April 13, 2018, has clarified that the recovery of arrears arising under the existing law shall be made as central tax liability to be paid through the utilization of the amount available in the electronic credit ledger or electronic cash ledger of the registered person, and the same shall be recorded in Part II of the Electronic Liability Register (FORM GST PMT-01).

Currently, the functionality to record this liability in the electronic liability register is not available on the common portal. Therefore, it is clarified that as an alternative method, taxpayers may reverse the wrongly availed CENVAT credit under the existing law and inadmissible transitional credit through Table 4(B)(2) of FORM GSTR-3B. The applicable interest and penalty shall apply on all such reversals which shall be paid through entry in column 9 of Table 6.1 of FORM GSTR-3B.

[Circular No. 58/32/2018-GST]

 

URL: http://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular_No.58.pdf;jsessionid=C9C65F831CED35AE0BBB553363F2B7FF


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