Transitional Credit on non - moving inputs

[Kaustubh Karandikar]

XYZ reversed the CENVAT credit during Excise regime on slow / non – moving inputs for which provision was made in the books of accounts to write off the same. During GST regime, again re – credit of the same was taken under the transitional credit provisions since there is no such requirement under the GST provisions. Show Cause Notice issued for such wrong availment of transitional credit. Any case law or circular or clarification to defend the case?

AI Summary

Dispute Over Reversal and Re-credit of CENVAT Credit on Non-moving Inputs During Transition to GST Regime A query was raised regarding the reversal and subsequent re-credit of CENVAT credit on slow or non-moving inputs during the transition from the Excise to GST regime. XYZ initially reversed the credit during the Excise regime due to provisions for writing off these inputs. Under GST, they reclaimed this credit through transitional provisions, as GST does not require such reversals. However, a Show Cause Notice was issued for allegedly wrong availment of this credit. A respondent requested the contents of the Show Cause Notice to help identify any supporting legal authority or precedent.