Question14:

 Currently EA-2000 is going on in the case of service tax assessee. During said EA-2000, party is informed by the department that they have not discharged service tax on reverse charge basis on certain services availed by them. Such service tax paid on reverse charge basis is available as ITC after payment as per Service Tax Provisions. How this can be claimed in GST regime either through transitional form which are available for revision till 27.12.2017 or through any other mode ?

Answer:

Provisions regarding taking of credit of any tax paid under GST are given under Section 16 of CGST Act, 2017.This section provides taking of credit of GST. In other words the said Section does not allow credit of any tax paid under earlier tax regimes, accordingly you will not be able to take credit of any amount paid as Service tax whether in forward charge or reverse charge.

Section 140 of the said CGST Act allowed migrating the closing balance (does not include tax to be paid by you ) of credit of June, 2017 returns of old tax regimes which you have already done. Migration of any old credit is not allowed after furnishing of Trans-  statement, accordingly this route also cannot be used to carry forward any credit of old regime. 

Provisions relating your question are contained under Section 142((7)(a) of CGST Act, 2017  which is reproduced below;

"(7)(a)   every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether before, on or after the pointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and if any amount becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of duty or tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act."

According to the above said legal provisions, you will have to make cash payment  for recovery of Service tax being made from you by Audit and credit of the same will not be available to you as the same has been prohibited under the above said sub-section. Further, credit under GST cannot be used to pay dues pertaining to Service Tax pointed out by Audit.  (Reply dt. 06/12/2017)