<p>The <strong>Government of India</strong> issued <strong>Circular No. 33/07/2018-GST</strong> to provide directions regarding the <strong>non-transition and non-utilization of certain CENVAT credits</strong> under the <strong>CGST Act, 2017</strong>. The key takeaways from this circular are:</p><h3><strong>1. Non-utilization of Disputed CENVAT Credit</strong></h3><ul><li>If a <strong>show cause notice</strong> was issued under <strong>Rule 14 of the CENVAT Credit Rules, 2004</strong>, and the last adjudication order (as of <strong>July 1, 2017</strong>) <strong>held the credit as inadmissible</strong>, then:<ul><li>Such <strong>disputed credit</strong> cannot be <strong>utilized</strong> for GST payments under CGST or IGST until the adjudication order is overturned.</li><li>If such credit is <strong>wrongly utilized</strong>, it <strong>shall be recovered with interest and penalty</strong>.</li></ul></li></ul><h3><strong>2. Non-transition of Blocked Credit</strong></h3><ul><li><strong>Certain types of CENVAT credit</strong> (e.g., on <strong>telecommunication towers and pipelines outside the factory premises</strong>) <strong>are ineligible for transition</strong> under <strong>Section 140(1)</strong>.</li><li>If <strong>blocked credit is carried forward</strong> into the electronic credit ledger <strong>illegally</strong>, it <strong>cannot be used</strong> and shall be <strong>recovered with interest and penalty</strong>.</li></ul><h3><strong>3. Undertaking for Credit Above ₹10 Lakhs</strong></h3><ul><li>If the <strong>disputed or blocked credit is more than ₹10 lakhs</strong>, the taxpayer must <strong>submit an undertaking</strong> to the jurisdictional officer stating that the <strong>credit has not been used</strong>.</li><li>If the amount is <strong>less than ₹10 lakhs</strong>, the same restrictions apply, but <strong>no undertaking is required</strong>.</li></ul><h3><strong>4. Compliance and Enforcement</strong></h3><ul><li>Taxpayers <strong>must ensure compliance</strong>, and any <strong>violation will result in recovery, interest, and penalties</strong>.</li><li>Businesses must <strong>verify their transitional credit claims</strong> and adhere to the regulations to avoid legal consequences.<a href="https://cms.plasament.com/storage/nisha/circularno-33-cgst.pdf">circularno-33-cgst</a><br> </li></ul>