Future of balance CENVAT and VAT Credit under GST

The open issues raised in the article are actually answered in the Revised GST Law.

As regards first point, credit of Education Cess and SHE Cess will be available under GST regime as section 167 talks of cenvat credit carried forward in a return. As the credit of Education Cess and SHE Cess is legitimately carried forward in return, there should not be any embargo in availing the same in GST regime also.

As regards second point, the unavailed credit on capital goods which is not carried forward in a return is admissible both under CGST and SGST laws so VAT credit which remains unavailed and not accounted in return will also be admissible to assessee as per section 168 of SGST Law.

As regards third point, section 171 clearly states that if goods are received on or after the appointed day but tax has been paid under earlier law and invoice has been issued under earlier law, then credit will be admissible. The section does not specifies the time limit for receipt of goods after appointed day.

As regards sixth point, it is clearly mentioned in section 169 (2) clearly states that the credit will be calculated in the manner as may be prescribed. It is understood that the manner of calculation and reflection in return will be intimated by the government in future.

The last point regarding credit availment of service tax if payment not made within 3 months is specifically covered by section 197 of Revised GST Law which states that re-credit may be claimed provided payment is made within 3 months from the appointed day.

Pradeep Jain Jain 28/12/2016