CENVAT BALANCE

[mk Jain]

Dear Sir,

If Assessee have CENVAT balance in Education Cess & SHEC as on date.

As per notification 12/2015 CE(NT)

'Provided also that the credit of Education Cess and Secondary and Higher Education Cess paid on input services received by the manufacturer of final product on or after the 1st day of March, 2015 can be utilized for payment of the duty of excise specified in the First Schedule to the Excise Tariff Act.'

There are restriction of dates and not clarity for credit taken before 1st March.

Now in GST scenario can we transfer for use this balance if we are showing in return ?

MK

TMTL

 

[Himansu Sekhar]

Yes, there is no restrictions in utilising the credit balance before 1st march.As per rule 3 of CCR availment is correct and no restrictions for utilising the credit.you can very much use the credit. This is my personal view.

[Rajagopalan Ranganathan]

Sir,

D.O.F.No.334/5/2015-TRU dated 30.04.2015 issued by Joint Secretary (TRU-I) clarifies that-

1) Rule 3(7)(b) of the CCR, 2004 has been amended so as to allow utilisation of credit of Education Cess and Secondary & Higher Education Cess for payment of basic excise duty in the following situations:

a. Education Cess and Secondary & Higher Education Cess on inputs or capital goods received in the factory of manufacture of final product on or after the 1st day of March, 2015;

b. Balance 50% Education Cess and Secondary & Higher Education Cess on capital goods received in the factory of manufacture of final product in the financial year 2014-15; and

c. Education Cess and Secondary & Higher Education Cess on input services received by the manufacturer of final product on or after the 1st day of March, 2015.

In view of the above credit balance of education cess and secondary and higher education cess as on 28.02.2015 will not be allowed to be utilised for payment of cenvat duty. The intent of the Government is that such balance would lapse. The only remedy available is to seek intervention of High Courts in exercise of their extra-ordinary powers under Art. 226 of Constitution of India.

 

[Himansu Sekhar]

Sorry sir, you are correct. This aspect is clarified at point no B21 of the tariff conf. Minutes

[Ganeshan Kalyani]

Yes there is no clarify as regard the closing balance of Cenvat as on 28.02.2015. And as regard carry forward of the said Cenvat under GST, in my view, it is allowed. This is for the reason that the amount appearing in the last return under current tax regime would be allowed to carry forward as opening cenvat in the GST. However , the eligibility of availing the credit may prone to litigation. Thanks.

[mk Jain]

Dear Sir,

Thanks to all for your expert comments on above issue, But matter is Controversial till now as per discussion because as per rule 3 (7)(b) of CCR 2004 date clause is there and Mr. Rajagopalan also refered.

And It would be allowed to carry forward as opening CENVAT in GST as advised by Mr. Kalyani..

And it is not fair that the such balance would lapse.

Mr. Himanshu also right ,that so many assesses utilized the all cenvat balance on behalf of notification 12/2015 CE(NT) either before or after 1st March 2015.

Seeking more views all of you.

Rgds,

MK

[KASTURI SETHI]

(i) Accumulated balance credit of He Cess and She Cess would not be allowed to carry forward in GST.

(ii) Further in my view, The sentence " inputs or input services received on or after 1.3.15 can be utilised for payment of the duty of Excise specified in the First Schedule..." means the word 'received' implies that those invoices issued before 28.2.15 but received on or after 1.3.15 are eligible to utilise credit of HE Cess and SHE cess toward Cenvat Duty(BED). Emphasis is supplied on "Before 28.2.15"

Similar is the case with Notification No.22/15-CE (NT) where cut-off date is 1.6.15.

[YAGAY andSUN]

Trade can file a writ petition on this matter. Further, there is no clarity or restriction as such as of know in the Model GST Laws. However, re-presentations can be submitted to the Central Government in this regard to allow the Cess in GST Laws.

[mk Jain]

Thanks sir

AI Summary

Cenvat balance carryforward of education cesses into GST is disputed, subject to receipt date cutoffs and potential litigation. Whether accumulated Cenvat balances of Education Cess and Secondary and Higher Education Cess can be utilised or carried forward into GST is contested. The dispute turns on amendments limiting utilisation to inputs, input services or capital goods received after a specified cut off date, with the administrative stance that balances existing as of the cut off will lapse. Practitioners diverge: some contend Rule 3 permits utilisation, while departmental clarifications and tariff conference notes restrict eligibility, producing litigation risk and prompting consideration of administrative representations or constitutional remedies.