CIRCULAR NO-58/2018-CBEC-20/16/4/2018-GST-Recovery of arrears of wrongly availed CENVAT credit under the existing law and inadmissible transitional credit.

Circular No. 58/32/2018-GST

Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing

New Delhi, Dated the 4th September, 2018


The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)

Subject: Recovery of arrears of wrongly availed CENVAT credit under the existing lawand inadmissible transitional credit – regarding

Various representations have been received seeking clarification on the process ofrecovery of arrears of wrongly availed CENVAT credit under the existing law and CENVATcredit wrongly carried forward as transitional credit in the GST regime. In order to ensureuniformity in the implementation of the provisions of the law across the field formations, theBoard, in exercise of its powers conferred under section 168 (1) of the Central Goods andServices Tax Act, 2017 (hereinafter referred to as the ‘CGST Act’), hereby specifies the
process of recovery of the said arrears and inadmissible transitional credit in the succeedingparagraphs.

2. The Board vide Circular No. 42/16/2018-GST dated 13th April, 2018, has clarifiedthat the recovery of arrears arising under the existing law shall be made as central tax liabilityto be paid through the utilization of the amount available in the electronic credit ledger orelectronic cash ledger of the registered person, and the same shall be recorded in Part II of the
Electronic Liability Register (FORM GST PMT-01).

3. Currently, the functionality to record this liability in the electronic liability register isnot available on the common portal. Therefore, it is clarified that as an alternative method,taxpayers may reverse the wrongly availed CENVAT credit under the existing law and

Circular No. 58/32/2018-GST

inadmissible transitional credit through Table 4(B)(2) of FORM GSTR-3B. The applicableinterest and penalty shall apply on all such reversals which shall be paid through entry incolumn 9 of Table 6.1 of FORM GSTR-3B.

4. It is requested that suitable trade notices may be issued to publicize the contents ofthis Circular.

5. Difficulty, if any, in implementation of this Circular may please be brought tothenotice of the Board. Hindi version would follow.

(Upender Gupta)
Commissioner (GST)


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