Goods and Services Tax – Started By: – bk r – Dated:- 24-5-2018 Last Replied Date:- 4-9-2018 – We are service provider and engaged in exporting our entire services and claim refund regularly quarterly for cenvat credit availed in respect of inputs service used for providing output service under Rule 5 of the Cenvat Credit Rules read with notification No. 27/2012 CEx and department was providing service tax refund. But after GST we submitted the refund claim for the Q.E.12/2016 on 25/09/2017, for Q.E 03/2017 on 26/12/2017 and for Q.E. 06/2017 on 27/03/2018. All claims were filed after GST implementation i.e. after 01/07/2017. We were having Cenvat Credit Balance of ₹ 92 lacs as on 30.06.2017 and the same was also shown in ST 3 return for the period of April 2017 to June 2017 as a closing balance. but this amount was not carried forward by us in the GST under Trans-1 or other wise. We took opening balance of ITC zero as on 01.07.2017 and no ITC claimed in respect of balance Cenvat
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ation. and the cenvat credit lying as on 01/07/2017 get lapsed. The Department also asked for the copy of return whereunder it has been shown that the amount claimed as refund has been reversed but after GST we filed GSTR-3B /GSTR-1 and in this returns no debit entry made as the cenvat credit balance as on 30/06/2017 was not carried forward in ITC of GST. We also cannot file any return under Service Tax. What we can do now. whether the department contention is right? and they reject my refund claim on these grounds. – Reply By KASTURI SETHI – The Reply = The department is absolutely right in this approach. You have committed Himalayan blunder by not carrying forward the balance in TRANS-1. The department extended the date for filing TRANS -1 in the interest of asseessees. Now you are on a warm wicket legally. But there is still hope for you. You should apply for refund and let the department reject it. You can get relief only through litigation only. Try your luck. Must fight. Path is
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inted day i.e. 1st July, 2017. Such proceedings may pertain to refund claims of CENVAT credit/VAT or export related rebate or service tax, such proceedings may either result in recovery of tax or refund. All such cases would be disposed of under the existing law. If any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse. Refund of CENVAT credit shall be paid in cash. There will be no refund of CENVAT if already carry forwarded. If any amount becomes recoverable, the same shall be recovered as arrear of tax under GST Act. Statutory provisions relating to transition are contained in chapter XX (section 139 to 142) of the CGST Act, 2017, SGST Act(s), 2017 and Rule 117 to 121 of the CGST Rules, 2017 . Based on above, the intention of the government is clear that right of the tax payer is not deprived. If one was not able to carry forward the credit, does not mean that credit may lapse. Please also note that credit will lapse only when it is
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efund claim under Section11 B (2) (d) of the Central Excise Act, 1944? Thanks. – Reply By bk r – The Reply = Sir I filed the refund under Rule 5 of the Cenvat Credit rules 2004 alongwith Notification No. 27/2012 CE (NT) dated 18.06.2012. Thanks sir – Reply By Alkesh Jani – The Reply = Sir, Under Rule 5 of the Cenvat Credit Rules, you are required to reverse the Cenvat credit. This is the reason department is insisting for the same. In the whole scenario, my suggestion is that, withdraw you claim and again filed the refund claim under Section 11B of the Central Excise Act, with proper grounds, if SCN has not been issued. Here, please note that Central Excise Act, 1944 has been repealed, but saved otherwise and also mentioned in Circulars is Section11B(2) of the said Act. Our experts may correct me if mistaken. Thanks – Reply By KASTURI SETHI – The Reply = Cenvat Credit Rules and Central Excise Rules are not independent of Central Excise Act. Any refund or rebate filed under Central Exci
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judgment on this matter now. – Reply By Ankur Jain – The Reply = This issue has created an analogy, the return for the period April-June 2017 was filed in August and by that time no refund application was filed. The refund claims were filed in the month of September and just by not carrying forward the refund amount in Tran-1, the Cenvat Credit shall deemed to be reversed as it has happened in one of our very own case. It was not a mandate to reverse the Credit claimed in the last return filed during the existing law but it was certainly a mandate that Cenvat Credit of refund claimed must not be transitioned in GST regime (which you have correctly done in present case). There is no infirmity as per the law in your refund claims and that must be allowed. In case the Adjudicating authority rejects the refund claim with lack of understanding of laws, I am very much sure that the refund shall be granted during the appellate proceedings. – Reply By BalKrishan Rakheja – The Reply = Thanks f
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o. please clarify. – Reply By KASTURI SETHI – The Reply = The department is right but you will get relief only through appellate channel. No Govt. Officer would take risk. – Reply By Alkesh Jani – The Reply = Sir,Have you received any Notice for rejecting the claim? If so, please mention full grounds for which rejection is purposed.Thanks – Reply By bk r – The Reply = Sir I have not received the SCN yet but I read out the draft SCN put up to the higher authorities by the technical wing and as I memories the issue is taken on the following groind. 1. That the notice was not eligible to retain cenvat credit lying balance as on 30.06.2017 under cenvat credit rules 2004, as there is no provisions under GST Law regarding retaining of Cenvat credit balance lying as on 30.06.2017 2. That as per Rule 15 of the Cenvat Credit Rules 2017 notified after supersession of Cenvat Credit rules 2004 the assess was required to transfer his entire cenvat credit to the Electronic credit ledger, but in this
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. Please guide whether the department contention is right. Is there any another way to avoid SCN as my huge amount will be blocked. – Reply By Alkesh Jani – The Reply = Sir, There is no way to avoid SCN. the only way out is to contest the SCN. Please wait till SCN is issued finally, because proposition and supposition may not help any way.Thanks – Reply By ROSHAN PRADHAN – The Reply = GST law allows Refund claim filed in respect of Cenvat Credit even after 1st July 2017 (appointed date), the same has to be disposed under existing law. Since law allows to process refund of cenvat credit under existing law, the requirement of transfer of credit to GST does not arise. If cenvat credit in respect of ₹ 92 lakhs meets the basic condition of claiming cevnat credit, there should be any problem ( Input suppliers payment to be made within the allowed time period ) and refund claim filed should be within time limit of 1 years Department is contending with procedural issues arising for main
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, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944) : If such claim for Cenvat Credit is fully or partially rejected – Amount so rejected shall lapse Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse : No refund of Cenvat if the same is carried forward as ITC under GST Act Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act. Refund claimed filed after the appointed date for refund of any duty/tax paid in respect of goods or services exported und
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