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2022 (1) TMI 744 - Commissioner - GSTCarry forward of credit - Refund claim - Other Category of Cesses which was carry forwarded in TRAN-1 and later on, the said amount was reversed in GSTR-3B return - adjudicating authority has rejected the refund claim by taking the main ground that credit of cesses could not be carried forward as per amended explanation 3 of Section 140 of CGST Act, 2017 - Section 54(1) of the CGST Act, 2017 - HELD THAT:- There is no iota of doubt in the fact that after insertion of explanation 3 of Section 140 of CGST Act vide S. 28 of the CGST (Amendment) Act, 2018 (31 of 2018) which were made effective from 1-7-2017, accumulated credit of cesses could not be carry forwarded and also could not be utilized for payment of outward supply. The Hon’ble Madras High Court in ASSISTANT COMMISSIONER OF CGST AND CENTRAL EXCISE, COMMISSIONER CGST AND CENTRAL EXCISE, UNION OF INDIA, CENTRAL BOARD OF EXCISE AND CUSTOMS VERSUS SUTHERLAND GLOBAL SERVICES PRIVATE LIMITED, GOVERNMENT OF TAMIL NADU, THE CHAIRMAN GSTN [2020 (10) TMI 804 - MADRAS HIGH COURT] hold that the assessee was not entitled to carry forward and set off of unutilized Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess against the GST output liability with reference to explanation 3 in Section 140 of CGST Act of the CGST Act, 2017. Further, it is observed that there is no explicit provision has been provided under Section 54 of CGST Act, 2017 for refund of such credit. From the provision of GST Law as well as in the light of the above Hon’ble Madras High Court judgment it is abundantly clear that once transition of cesses to GST credit ledger is held as inadmissible, as natural corollary, cash refund of the same would also not be permissible. The issue whether the balance of credit of cesses was liable to be refunded or not, was also raised in case of BANSWARA SYNTEX LTD. VERSUS THE COMMISSIONER, CENTRAL EXCISE & SERVICE TAX [2018 (10) TMI 1064 - RAJASTHAN HIGH COURT] before the Hon’ble Rajasthan High Court wherein also given the answered in negative. In view of the provision of Section 140 (explanation 3 of the said section), Section 54 of the CGST Act, 2017 and various judgments in favour of the department, it is held that the adjudicating authority has rightly rejected the said refund claim and there are also no infirmity in the said order - appeal dismissed.
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