The Central Board of Indirect Taxes & Customs (“CBIC”) vide its Circular No. 87/06/2019-GST dated January 02, 2019 clarifies that CENVAT credit of service tax paid u/s 66B of Finance Act, 1994 was available as transitional credit u/s 140(1) of CGST Act and the legal position has not changed due to amendment of section 140(1). The gist of other clarification are discussed as here under for the ease of understanding: –
- Sub-section (a) of section 28 of the CGST (Amendment) Act, 2018, which provides that section 140(1) of the CGST Act, 2017 be amended with retrospective effect to allow transition of CENVAT credit under the existing law viz. Central Excise and Service Tax law, only in respect of “eligible duties”.
- The transition of credit of taxes paid under section 66B of the Finance Act, 1994 was never intended to be disallowed under section 140(1).
- The word “duties” is used interchangeably with the word “taxes” and in the present context, the two words should not be read in a disharmonious manner.
- No transition of credit of cesses, including cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975.
The Circular can be accessed at: http://www.cbic.gov.in/resources//htdocs-cbec/gst/circular-cgst-87.pdf;jsessionid=F45D1A7C38AC8658E44906663FA817DB