Maharashtra AAR rules that accumulated credit by way of Krishi Kalyan Cess (KKC) as appearing in Service Tax Return of Input Service Distributor (ISD) as on June 30, 2017 which is carried forward in electronic credit ledger maintained by company under CGST Act, cannot be considered as admissible Input Tax Credit. Perusing the transitional provisions under CGST Act as well as provisions of CENVAT Credit Rules, AAR notes that it was expressly made clear that credit of KKC would be utilized for payment of KKC only, and no other credit could be utilized for payment of KKC either. Referring to Delhi HC decision in Cellular Operators Association of India, AAR observes that KKC cannot be treated as excise duty or service tax and in view thereof, CENVAT credit as referred to in Section 140(1) of CGST Act would not include credit in respect of KKC.
The ruling was delivered by Shri. B. V. Borhade (State Tax) and Shri. Pankaj Kumar (Central Tax).