Central Tax Circulars

CGST Circular 58/2018

To,

The Principal Chief Commissioners/Chief Commissioners/Principal
Commissioners/ Commissioners of Central Tax (All)

The Principal Directors General/ Directors General (All)

Subject: Recovery of arrears of wrongly availed CENVAT credit under the
existing law and inadmissible transitional credit – regarding

1) Various representations have been received 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 Board, in exercise of its powers conferred under section 168 (1) of
the Central Goods and Services Tax Act, 2017 (hereinafter referred to as
the ‘CGST Act’), hereby specifies the process of recovery of the said
arrears and inadmissible transitional credit in the succeeding
paragraphs.

2) The Board vide Circular No. 42/16/2018-GST dated 13th April, 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).

3) 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.

4) It is requested that suitable trade notices may be issued to publicize
the contents of this Circular.

5) Difficulty, if any, in implementation of this Circular may please be
brought to the notice of the Board. Hindi version would follow.