In this article, we will understand that whether Transfer of credits of cesses such as Education Cess, Secondary and Higher Education Cess, Swatch Bharat Cess and Krishi Kalyan Cess or KKC credit are allowed or not as per the transitional provisions?
The expression “eligible duties and taxes” means-
The list of items does not include cesses viz. education cess, secondary higher education cess, kalyan closing or krishi kalyan cess that are allowed to be taken as CENVAT Credit under current regime.
The Transitional provisions under the CGST Act allow carryover of only the Cenvat Credit and Credit of eligible duties mentioned in the explanations given at the end of section 140. Education Cess & Secondary and Higher Education Cess are not mentioned there. Therefore these will not be carried forward as credit of these cesses is not allowed under GST, it can cess be adjusted in GST.
Swatch Bharat Cess(SBC) and Krishi Kalyan Cess (KKC portal) will not be eligible for carry forward to GST regime as credit of these cesses is not allowed under GST. The cesses will also not be leviable under GST to the extent they are levied as duties of excise (except on excluded items) or Service Tax or as a surcharge.
Thus, to conclude we come to the point that credits of cesses such as Education Cess, Secondary and Higher Education Cess, Swatch Bharat Cess and Krishi Kalyan Cess or KK Cess are not eligible for TRANS-1.
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