CBIC clarification on Recovery of Arrears of wrongly availed Cenvat Credit

CBIC has clarified regarding the process of recovery of arrears of wrongly availed Cenvat Credit under the existing law and Cenvat credit wrongly carried forward as transitional credit in the GST regime. The Board had earlier clarified that recovery of arrears arising under the existing law shall be made as Central tax liability and should be paid by utilising the balance available in the electronic credit ledger or electronic cash ledger. The same shall be recorded in Part II of the electronic liability register (FORM GST PMT-O1).

The functionality of recording the liability in the electronic liability register is not available on the GST portal and an alternative method has been prescribed. The taxpayers can reverse through Table 4(B)(2) of Form GSTR-3B. Interest and penalty which will be applicable on such reversal will be paid through entry in Table 6.1 of Form GSTR-3B.