Question

XYZ receiving Coal where the supplier is charging CESS in the Tax Invoice. Can XYZ take input tax credit of the CESS charged in the invoice?

Answer

As per Section-11 of GST (Compensation to States) Act,2017 The provisions of the Central Goods and Services Tax Act, and the rules made thereunder, including those relating to assessment, input tax credit, non-levy, short-levy, interest, appeals, offences and penalties, shall, as far as may be, mutatis mutandis, apply, in relation to the levy and collection of the cess leviable under section 8 on the intra-State supply of goods and services, as they apply in relation to the levy and collection of central tax on such intra-State supplies under the said Act or the rules made thereunder.

Therefore as per above mentioned law, provisions of CGST Act and rules shall apply to cess leviable on intra state supply of goods and services and thus credit of cess charged in the invoice can be availed however the credit of GST Cess paid can be utilized only towards payment of the GST Cess liability and shall not be utilized towards payment of CGST/SGST/IGST.  (Reply dt.20/04/2019)