Service tax credit

[manish kumar]

Sir,

A builder has Shown closing balance of Cenvat credit in their April to June, 2017 ST-3 return of apuprox. 05 lakhs & now their project has been closed because they have issued B.O.C. for their building project. & they have not claimed any ITC credit in Trans-1. Now during audit if liability comes for payment of Service tax payment , can they utilise their closing balance of Credit for payment of Service Tax.

AI Summary

Cenvat credit transition: untransferred pre GST credits may discharge pre GST service tax liabilities, subject to departmental approval and litigation.
A builder failed to transfer closing Cenvat/service tax credit to GST via TRAN-1; although transitional rules required such transfer, the taxpayer may nonetheless seek to apply pre GST credits against pre GST service tax liabilities. The omission to file TRAN-1 constitutes a procedural lapse risking forfeiture, so taxpayers should notify the department, seek refund or permission to utilize the credit, and be prepared to litigate or appeal to protect substantive credit rights.