Recovery of Arrears of Wrongly Availed CENVAT Credit: Circular No. 58/32/2018-GST
<p><span>The Central Board of Indirect Taxes and Customs (CBIC) issued Circular No. 58/32/2018-GST on 4th September 2018, to clarify the process of recovery of arrears of wrongly availed CENVAT credit under the existing law and inadmissible transitional credit under the GST regime. Here are the key highlights:</span></p><p><span><strong>1. Recovery of Arrears as Central Tax Liability</strong></span></p><ul><li><span>As per Circular No. 42/16/2018-GST, arrears arising under the existing law shall be recovered as central tax liability.</span></li><li><span>This liability can be paid through the electronic credit ledger or electronic cash ledger and recorded in Part II of the Electronic Liability Register (FORM GST PMT-01).</span></li></ul><p><span><strong>2. Alternative Method for Reversal of Credit</strong></span></p><ul><li><span>The functionality to record this liability in the electronic liability register is not yet available on the common portal.</span></li><li><span>Taxpayers may alternatively reverse the wrongly availed CENVAT credit and inadmissible transitional credit through Table 4(B)(2) of FORM GSTR-3B.</span></li><li><span>Applicable interest and penalty for such reversals shall be paid through entry in column 9 of Table 6.1 of FORM GSTR-3B.</span></li></ul><p><span><strong>3. Trade Notices and Implementation</strong></span></p><ul><li><span>Suitable trade notices are requested to be issued to publicize the contents of this circular.</span></li><li><span>Any difficulties in implementation should be reported to the Board.</span> <a href="https://cms.plasament.com/storage/circular-no58.pdf">circular_no.58</a><br> </li></ul>