TaxTMI 
TaxTMI 
As per April 2018 circular, arrears of central excise and service tax can be paid through ITC register. similarly arrears of VAT, entry tax, Luxury Tax of Karnataka can be paid through ITC register. Can the arrears of Central Tax Act arising out of assessment finalization in February 2020 for pre-GST period be paid through ITC register?
Can the arrears of CST for pre-GST period be paid through ITC register
04 Mar 2020 
9 Replies 
6508 Views Asked by
Input Tax Credit ledger can discharge central sales tax arrears under transitional recovery as arrears of central tax.
Whether pre-GST CST arrears may be discharged via the electronic input tax credit ledger is debated. CBIC Circular No. 42/16/2018 allows arrears of central excise and service tax not recovered under existing law to be recovered as central tax liabilities payable through electronic credit or cash ledgers. The CGST Act's definition of existing law and its transitional provision provide that amounts recoverable under existing law, if not recovered thereunder, shall be recovered as arrears under CGST, enabling utilization of electronic ledger balances to pay such arrears, though CST officers may still seek recovery under legacy CST procedures where applicable. (AI Summary)
Whether pre-GST CST arrears may be discharged via the electronic input tax credit ledger is debated. CBIC Circular No. 42/16/2018 allows arrears of central excise and service tax not recovered under existing law to be recovered as central tax liabilities payable through electronic credit or cash ledgers. The CGST Act's definition of existing law and its transitional provision provide that amounts recoverable under existing law, if not recovered thereunder, shall be recovered as arrears under CGST, enabling utilization of electronic ledger balances to pay such arrears, though CST officers may still seek recovery under legacy CST procedures where applicable. (AI Summary)