Goods manufactured under excise regime now written off

[Kaustubh Karandikar]

XYZ(Manufacturer) had transferred the unutilized CENVAT credit laying in balance as on July’17 to Electronic credit ledger under GST through TRAN – 1. They are holding certain manufactured stocks of excise regime which they now want to write off. Are they required to proportionately reverse the input tax credit since they had transferred the unutilized CENVAT credit through TRAN – 1 from Excise regime To GST regime?

[DR.MARIAPPAN GOVINDARAJAN]

Yes, they have to definitely reverse the same and the consequences also in GST transfer.

[Ganeshan Kalyani]

Dear Sir, one of the condition in transitional provision was that the duty paid stock should be sold as taxable under GST. Since, some stock is not sold yet, then input tax credit to that extend is not admissible.

[KASTURI SETHI]

I support the views of both experts.

AI Summary

Input tax credit reversal required where excise-era manufactured stock is written off, since migrated credit applies only to taxable sales. Manufacturers who transferred unutilised CENVAT credit via TRAN-1 must reverse the proportionate input tax credit for excise-era manufactured stock that is written off or remains unsold, because transitional provisions allow migration of duty-paid credit only for stock used or sold as taxable supplies under GST.