Retrospective amendments in GST transitional provisions have shocked biz

Credits not allowed to be offset for output liability are costs to business

When the new indirect tax regime came into effect on July 1 last year, the transition provisions allowed businesses to transition CENVAT credit as an input credit under GST. Many businesses took the position that the balance of total CENVAT credit carried forward in their last return was eligible for being transitioned into the GST regime. This included the remaining CENVAT credit of excise duties paid on inputs/ capital goods, service tax on input services and cesses, such as education cess as well as Krishi Kalyan cess.

However, tax authorities have disagreed with the interpretation that credit of cesses can