Cenvat credit of Exempted goods.

[Sajesh Sahadevan]

One assessee had two manufacturing units .One unit produced dutiable goods and another units produced exempted goods. Both units were operating in different premises. The assessee was filing monthly return for the clearance of dutiable goods only. When GSTA rolled out , the assessee took the cenvat credit of inputs/input services of exempted goods manufactured into the ER-1 filed for the month of June 2017 in respect of the dutiable goods . The exempted goods still exempted under GSTA and the assessee is following the reversal of proportionate credit after GST in respect of Exempted clearance. Sir, please inform whether the assessee is eligible to take the input/input service credit of exclusively exempted goods into ER-1 and carry forward that in Tran-1 and whether the assessee is eligible to follow the proportionate credit reversal after GST for the exempted clearances made from another premises after 01.07.2017 . Please help.

AI Summary

Eligibility to Claim Cenvat Credit for Exempted Goods Inputs and Carry Forward Under Section 140 of CGST Act An assessee with two manufacturing units, one producing dutiable goods and the other exempted goods, sought clarification on the eligibility to claim Cenvat credit for inputs used in exempted goods, and whether this credit could be carried forward in the Tran-1 form after the GST rollout. One response indicated that carrying forward such credit through TRANS-I is not permissible under Section 140 of the CGST Act due to non-compliance with filing requirements. Another response suggested that input tax credit on inputs used for exempted goods is eligible.