Transitional provisions- Where Cenvat credit of Service tax reversed due to non -payment of dues

Under service tax provisions, it is provided that where payment to supplier of service is not made within three months of provision of service, Credit of such service tax required to be reversed and it could be reclaimed only after payment of dues to supplier.

Under Transitional provisions of GST, a remedy is being provided in case where such credits are reversed because of existing service tax laws, and payment is being made after implementation of GST.

As per GST transitional provisions, such credits can be reclaimed under GST subject to the condition that “the registered person has made the payment of the consideration for that supply of services within a period of three months from the appointed day (i.e. from 01.07.2017)”.

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