Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 25-8-2018 Last Replied Date:- 27-8-2018 – Under section 16 the GST law, during the transition from pre-GST regime to GST regime w.e.f. 1.7.2017, earlier tax credits are allowed to be carried forward in GST regime and benefit could be availed subject to transitional provisions as contained in section 140 of the GST law. While there are doubts amongst taxpayers as to whether Cenvat Credit of Cesses (e.g., Krishi Kalyan Cess, Swachh Bharat Cess etc) paid under pre-GST regime would be allowed to be carried forward and availed in the GST regime like other taxes or duties, assessees have resorted to advance ruling under section 97 of the GST law from Authority of Advance Rulings (AAR) constituted under section 96 of the said law. The background of this case is that KKC was levied as per section 161 of the Finance Act, 2016. Section 161(5) of the Finance Act specified that for levy and collection of KKC, Chapter V of Finance A
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t Credit Rules has recognized KKC as Cenvat credit and Section 16 and Section 17 of the Act, which determines admissibility of input tax credit puts no restriction in admission of KKC as Cenvat credit under the aforesaid provision of the Act. According to one such advance ruling in the matter of Kansai Nerolac Paints Ltd. (2018) 12 GSTL 526 (AAR-Maharashtra); (2018) 5 TMI 458 (AAR-Maharashtra); in the pre-GST regime, the assessee was registered as Input Service Distributor (ISD) for its Head Office to distribute eligible credit to its respective manufacturing units. The assessee wanted to carry forward the accumulated credit of Krishi Kalyan Cess (KKC)appeared in service tax return on June 30, 2017 to the electronic credit ledger under the GST Act. In the post-GST regime, neither there is specific restriction in law regarding admissibility of KKC nor there is any specific provision regarding admissibility of KKC as input tax credit. It filed the application for Advance Ruling regarding
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(Civil) 7837 of 2016] [ 2018 (2) TMI 1264 – DELHI HIGH COURT ] case denied cross utilisation of unutilized education cases against excise duty and service tax liability as these cesses had not been subsumed and there was no provision in law to cross utilize the unutilized education cesses with excise duty and service tax. Secondly, one of the response given by CBEC in its FAQ s had negated the assessee s claim. (which does not have any legal binding). Being aggrieved, the applicant preferred an appeal u/s 100 of the GST law before Appellate Authority for Advance Ruling (AAAR) which approved the aforementioned ruling of AAR by passing an order u/s 101 of the GST law. The AAAR examined the erstwhile Cenvat Credit Rules, 2004 and formed a view that KKC could be utilized towards payment of KKC only. The KKC cannot be adjusted or cross utilized against the payment of excise duty or service tax. It was made expressly clear that Cenvat credit of input duty specified in the rule 3 i.e. excise
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