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Assessee is not entitled to carry forward and set off of unutilised Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess against the GST Output Liability with reference to Section 140 of the CGST Act, 2017.

Section 140 of the CGST Act, 2017 — Transitional Credit of EC, SHEC and KKC – The appellant challenged the decision of learned single Judge on 05.09.2019. The respondent assessee was allowed to carry forward and utilize the credit, which was rejected vide impugned order on the ground that credit could be set-off only as against the specific duties and taxes enumerated in the Explanation to Section 140(1) r/w 117 of the Rules, since the explanation did not cover cesses such as EC, SHEC and KKC. The appellant submitted that the levy of Cess was not continued after 2015 nor such levy was subsumed in the listed 16 taxes which were subsumed under the GST law, the credit in respect of such Cess could not be claimed against the Output GST liability. The court observed that three types of Cess involved i.e. Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess were not subsumed in the new GST Laws, either by the Parliament or by the States. Therefore, the question of transitioning them into the GST Regime and giving them credit under against Output GST Liability cannot arise. Held that:- The Hon’ble High Court allowed the appeal of the Revenue and hold that the Assessee was not entitled to carry forward and set off of unutilised Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess against the GST Output Liability with reference to Section 140 of the Act, 2017.