ITC of Service Tax paid under RCM

[Ashwarya Agarwal]

I am a steel manufacturer. I have received transportation service from GTA in the month of June.

As per the erstwhile Excise and Service Tax law, I had deposited applicable service tax liability for the month of June 2017 on 06.07.2017. However I was not eligible to claim cenvat of that service tax amount against my excise liability for the month of June 2017 because of the provisions of Cenvat Credit Rules.

Now GST law is applicable w.e.f 01.07.2017. How can I claim cenvat / ITC of the above mentioned service tax paid in July?? Is there any provision in GST law??

[DR.MARIAPPAN GOVINDARAJAN]

In my view you cannot claim.

[Rajagopalan Ranganathan]

Sir,

If the credit is not admissible under Cenvat Credit Rules, 2004, the same is not admissible under GST Act also. However please inform under which rule of Cenvat Credit Rules, 2004 the credit is not admissible.

[KASTURI SETHI]

At present ITC of ST paid for June, 17 in July, 17 is not admissible in GST. However, we can expect clarification from Board. You must bring it to the notice of GST Council.

[Rajagopalan Ranganathan]

Sir,

You can file the ST=2 return for the for the period April 2017 to June 2017 upto August 15, 2017. Even if you have paid service tax for June , 2017 on 6.7.2017 you could have included the payment in the return. Then automatically you will get the credit in your electronic credit ledger.

[Ganeshan Kalyani]

Such type of transition input tax credit is generally lost. For e.g. 2% education cess and 1% s.h.edu.cess.

AI Summary

Input tax credit transition: service tax paid post period under reverse charge is not claimable under GST without timely pre GST return.
Credit not admissible under Cenvat Credit Rules remains not claimable under GST; service tax paid in July for June services does not automatically qualify for GST input tax credit on transition. Filing the pre GST ST 2 return for April-June within the allowed window could permit inclusion of payment and credit in the electronic credit ledger, but where return filing or eligibility under Cenvat was lacking, the transitional ITC is lost.