Transitional Credit to be written off

[Kaustubh Karandikar]

a) XYZ Pvt. Ltd. have unutilised balance in Excise PLA A/c from F Y 2014-15 onwards under Education Cess and SHEC. Post GST XYZ also applied for refund through ACES portal, but did not receive the refund. Whether this amount is required to be written off in the books of accounts? The statutory auditors want confirmation on the same. b) XYZ paid service tax under RCM as per Excise Audit of Apr-16 to June-17 with interest & penalty. This amount could not be claimed post GST introduction. Whether this amount to be written off in books of accounts or to keep under receivables? The statutory auditors want confirmation on the same.

[Ganeshan Kalyani]

It depends upon the probability. In first query, the chances are less to get refund. So, should be written off in the books of accounts. In the second, the credit was to be carried forward to GST thru Tran-1. If the same did not happen, then the chances of claim it is also less. Thus, should be written off.

AI Summary

Transitional credit write-off: unutilised pre-GST excise credits and RCM payments unlikely claimable, so record as write-offs.
Where unutilised Excise PLA balances for Education Cess and SHEC were not refunded and recovery prospects are remote, they should be written off; similarly, service tax paid under RCM with interest and penalty that was not carried forward via Tran-1 and is unlikely to be claimed should be written off rather than retained as receivables, and auditors should be provided confirmation based on the recoverability assessment.