CBIC issues clarification regarding recovery of arrears under the Central Excise and Service Tax law and reversal of inadmissible input tax credit
Central Board of Indirect Taxes and Customs has issued Circular No. 42/16/2018-GST dated 13th April,2018 and has clarified the procedure for recovery of arrears under Central Excise Act and Service Tax Act and reversal of inadmissible input tax credit.
The Key Points of the Circular are :
- Recovery of arrears of wrongly availed CENVAT Credit :
In case where any proceeding of appeal, review or reference relating to a claim for CENVAT credit had been initiated under the previous law and any amount of such credit becomes recoverable, the same shall be recovered as an arrear of tax under the CGST Act.
- Recovery of CENVAT Credit carried forward wrongly:
CENVAT credit of central excise duty/service tax availed, may be carried forward in terms of transitional provisions of the CGST Act. Any credit which is not admissible in terms of the CGST Act shall not be allowed to be transitioned or carried forward and the same shall be recovered as an arrear of tax under the CGST Act.
- Recovery of arrears due to revision of return under the existing law:
In case, any return furnished under the existing law is revised after the appointed day and if, pursuant to such revision, any amount is found to be recoverable or any amount of CENVAT credit is found to be inadmissible, the same shall be recovered as an arrear of tax under the CGST Act.
- Recovery of central excise duty, service tax or wrongly availed CENVAT credit thereof under the existing law and inadmissible transitional credit:
The CENVAT credit of central excise duty or service tax wrongly carried forward as transitional credit shall be recovered as central tax liability to be paid through the utilization of amounts 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).
- Recovery of interest, penalty and late fee payable:
The arrears of interest, penalty and late fee in relation to arrears of central excise duty, service tax or wrongly availed CENVAT credit shall be recovered as interest, penalty and late fee of central tax to be paid through the utilization of the amount available in electronic cash ledger of the registered person and the same shall be recorded in Part II of the Electronic Liability Register.
- Payment of central excise duty & service tax on account of returns filed for the past period:
The registered person may file Central Excise / Service Tax return for the period prior to 1st July, 2017 by logging onto www.aces.gov.in and make payment relating to the same through EASIEST portal (cbec-easiest.gov.in). However, with effect from 1st of April, 2018, the return filing shall continue on www.aces.gov.in but the payment shall be made through the ICEGATE portal.
- Recovery of arrears from assessees under the existing law in cases where such assessees are not registered under the CGST Act, 2017:
In case of recovery of arrears where assesses are not registered under the CGST Act, 2017, arrears shall be recovered in cash, as per the provisions of previous law.
For further details please refer the attached circular.