CENVAT credit transitioned was utilised during composite period by the builder., Goods and Services Tax - GST

[KALLESHAMURTHY MURTHY]

Dear all,

A building contractor has availed transitional credit under CENVAT and utilised some part of it up to 2018-19. In 2019-20 he opted for composition but carried forward all ITC including ITC on other purchases made up to 2018-19. The Enforcement authorities have identified that the ITC was wrongly carried forward into the composition period and asked to reverse the entire ITC. The builder reversed the ITC carried forward relating to regular purchases but opposed reversing of CENVAT credit contending that the restriction of transitional CENVAT credit under sec. 17(2) r/w rule 42 does not arise and is entirely eligible to utilise and also set off against output tax liability up to 2022-23. Is CENVAT utilised correctly, since he cannot forego CENVAT credit?

Posts / Replies

[Shilpi Jain]

Possible argument. But this issue will be settled in Courts only in case anybody takes this stand.

[Sadanand Bulbule]

Dear Murthy

Peruse the comprehensive discussion on the subject query at Issue ID No.119302.