Circular No. 42/16/2018-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, Dated the 13th April, 2018
The Principal Chief Commissioners/Chief Commissioners/ Principal Commissioners/
Commissioner of Central Tax (All) / The Principal Directors General/ Directors General(All)
Sub: Clarification regarding procedure for recovery of arrears under the existing lawand reversal of inadmissible input tax credit-reg.
Kind attention is invited to the provisions of the Central Goods and Services Tax Act,2017 (hereinafter referred to as the CGST Act) relating to the recovery of arrears of centralexcise duty /service tax and CENVAT credit thereof, CENVAT credit carried forwarderroneously and related interest, penalty or late fee payable arising as a result of theproceedings of assessment, adjudication, appeal etc. initiated before, on or after the appointeddate under the provisions of the existing law. In this regard, representations have beenreceived seeking clarification on the procedure for recovery of such arrears in the GSTregime.
2. The issues have been examined and to ensure uniformity in theimplementation of theprovisions of the law across the field formations, theBoard, in exercise of its powersunder section 168 (1) of the Central Goods and Services Tax Act, 2017,(hereinafter referred to as the “CGST Act”) hereby specifies the procedure to be followed forrecovery of arrears arising out of proceedings under the existing law.
3. Legal provisions relating to the recovery of arrears of central excise duty and
service tax and CENVAT credit thereof arising out of proceedings under the existinglaw (Central Excise Act, 1944 and Chapter V of the Finance Act, 1994)
i) Recovery of arrears of wrongly availed CENVAT Credit:
In case where any proceeding of appeal, review or reference relating to a claim forCENVAT credit had been initiated, whether before, on or after the appointed day,under the existing law, any amount of such credit becomes recoverable, the sameshall, unless recovered under the existing law, be recovered as an arrear of tax undertheCGST Act [Section 142(6)(b) of the CGST Act refers]…