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CA Final · Indirect Tax Laws · Miscellaneous Provisions (GST)

Nair Steel received a refund claim order under the existing law: a claim for CENVAT credit refund was filed before the appointed day and was partially rejected by the authority. Nair had not carried forward the rejected balance under GST. What happens to the rejected amount?

The rejected amount lapses. Under the transitional provisions, where a claim for refund of CENVAT credit is fully or partially rejected, the rejected portion lapses. It cannot be carried forward as GST input tax credit, and only the amount found admissible is paid in cash under the existing law.

  1. AIt is carried forward as input tax credit under GST
  2. BIt lapsesCorrect
  3. CIt is refunded in cash under GST law
  4. DIt is adjusted against output tax liability under GST

Explanation

Under the transitional refund provisions, where a claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse. Only the amount eventually accruing is paid in cash under existing law. It cannot be taken as credit under GST.

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