REVERSAL OF TRAN CENVAT CREDIT

[Sadanand Bulbule]

Dear experts

1] Whether the taxpayer engaged in the supply of works contract services need to reverse "un-availed CENVAT" credit landed in the ITC ledger as provided under Section 140, in the event of obtaining the Occupancy Certificate or Completion Certificate" under Section 5[b] of Second Schedule to the CGST Act?

2] Whether such CENVAT credit under Section 140 automatically takes the legal form of 'Input Tax' as prescribed under Section 2[62] in the absence of any inward supply of services or goods or both under the CGST Act, irrespective of requirement of reversal of ITC under Section 17[3]?

Plz pour thoughts.

AI Summary

Transitional CENVAT credit treatment affects reversal and refund when occupancy/completion alters supply character under GST.
Whether unutilised transitional CENVAT credit migrated under Section 140 must be reversed on issuance of occupancy/completion certificate turns on whether the credit was lawfully transitioned and whether the underlying transaction remains within the scope of GST. Contributors generally view properly migrated transitional credit as a distinct deemed entitlement that does not automatically become Input Tax under Section 2(62); reversal or refund consequences therefore require fact-specific analysis of admissibility at transition, the legal character of the supply (including post-completion non-GST character), and applicable notifications and CBIC guidance.