In a circular issued by the Central Board of Indirect Taxes and Customs (CBIC) last day, the procedures relating to recovery of arrears of central excise duty /service tax and CENVAT credit carried forward erroneously and related interest, penalty or late fee payable arising as a result of the proceedings of assessment, adjudication, appeal etc. initiated before, on or after the appointed date under the provisions of the Goods and Services Tax ( GST ) law has been explained by the Government.
With regard to the recovery of arrears of wrongly availed CENVAT Credit, the Board said that in case where any proceeding of appeal, review or reference relating to a claim for CENVAT credit had been initiated, whether before, on or after the appointed day, under the existing law, any amount of such credit becomes recoverable, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under the CGST Act.
For the recovery of CENVAT Credit carried forward wrongly, the Board advised that the CENVAT credit of central excise duty/service tax availed under the existing law may be carried forward in terms of transitional provisions as per section 140 of the CGST Act subject to the conditions prescribed therein. Any credit which is not admissible in terms of section 140 of the CGST Act shall not be allowed to be transitioned or carried forward and the same shall be recovered as an arrear of tax under section 79 of the CGST Act.
The Board further said that the recovery of central excise duty/ service tax and CENVAT credit thereof arising out of the proceedings under the existing law, unless recovered under the existing law, and that of inadmissible transitional credit,is required to be made as an arrear of tax under the CGST Act.
It further prescribed the procedure for the recovery of arrears.
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