transitional credit carried forward in gst

[Richa Goyal]

we had a balance of central excise credit which we carried forward in CGST in the TRANS -1 form. We did not utilize the CGST balance due to an ongoing litigation in the matter. Eventually , we reveresed the CGST credit in GSTR- 3B. Now the department states that we will have to pay the whole credit in cash as ongoing credit cannot be considered due change in regime from central excise to GST... Please guide.

AI Summary

Dispute Over Reversed Central Excise Credit in TRANS-1 Form: Is Additional Cash Payment Necessary? A user raised a query regarding the reversal of central excise credit carried forward to CGST via the TRANS-1 form, which remained unused due to ongoing litigation. The department demands cash payment for this credit, citing the transition from central excise to GST. Respondents disagree with the department, arguing that reversed credit equates to credit not taken, thus negating the need for cash payment. They reference court rulings and a circular (No. 42/2018) supporting their stance, emphasizing that the reversal is akin to payment and should not require additional cash settlement.