Transitional credit taken directly in the GSTR 3B

[Hariharan Sundaram]

Dear experts, one taxpayer has taken the transitional credit directly in the GSTR 3B. He has filed erstwhile ER1 and ST3 returns for the month of June 2017 and the period ending on 30.06.2017 as NIL . In other words, without reflecting the Cenvat credit in the last filed returns filed during the erstwhile GST regime he has taken the credit straight away in the GSTR 3B. Now the department issued GST DRC 1A to recover the same . Kindly guide to come out of this issue

AI Summary

Taxpayer Challenges GST Credit Recovery via GSTR 3B; Experts Debate Section 140 Violation and Legal Options A taxpayer took transitional credit directly in GSTR 3B without reflecting it in the last filed returns under the previous GST regime. The tax department issued a GST DRC 1A to recover the credit. Experts suggest that the taxpayer can communicate disagreement with the liability using Form DRC-01A and may need to appeal up to the High Court due to expired deadlines for revising returns. Some experts believe the case is a clear violation of Section 140 of the CGST Act, making legal success unlikely. Others suggest fighting for eligibility of the claim in court, despite procedural issues.