TaxTMI 
TaxTMI 
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
Transitional credit taken directly in the GSTR 3B
29 Oct 2020 
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Transitional credit eligibility can be contested via DRC 01A reply and appellate remedies despite procedural time limits.
Transitional credit taken directly in GSTR 3B without corresponding entries in erstwhile returns prompted issuance of DRC 01A; the taxpayer should use Part B of that form to contest the liability and pursue the statutory appeal hierarchy, and if necessary approach the High Court to establish entitlement to eligible CENVAT credit. Responses note Section 140 and a retrospective amendment via Notification 43/2020 limit late claims, so litigation should focus on substantive eligibility and a cost benefit assessment of contesting recovery. (AI Summary)
Transitional credit taken directly in GSTR 3B without corresponding entries in erstwhile returns prompted issuance of DRC 01A; the taxpayer should use Part B of that form to contest the liability and pursue the statutory appeal hierarchy, and if necessary approach the High Court to establish entitlement to eligible CENVAT credit. Responses note Section 140 and a retrospective amendment via Notification 43/2020 limit late claims, so litigation should focus on substantive eligibility and a cost benefit assessment of contesting recovery. (AI Summary)