Circular No.ES/191/2018-19 September 05, 2018
To: Members of the Council
Sub.: Recovery of arrears of wrongly availed CENVAT credit under the existing law and inadmissible transitional credit.
We would like to inform you that CBIC has issued Circular No. 58/32/2018- GST dated 4th September, 2018 specifying that an alternative mechanism of recovery process of arrears in case of wrongly availed CENVAT credit under the existing law and CENVAT credit wrongly carried forward as transitional credit in the GST regime.
CBIC had earlier clarified vide Circular No.42/16/2018-GST dated 13th April, 2018 that 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.
However, noting the unavailability of functionality to record this liability in the electronic liability register on the common portal, the Board has 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”. It also clarified that “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”
Members may kindly make a note of the above.