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Cenvat Credit

CA Suneel Kumar Yadav (Manager Credit) (125 Points)

05 March 2011

there is a provision in Finance Act regarding-
if any service provider takes %ge based abatement then he will not be entitled to take any credit of Input/capital goods/service tax.

Is there any similar provision in Central Excise????

support your answer with legal provisions.

Thanks a Lot

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4 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 05 March 2011

CENVAT CREDIT RULES ARE OF CENTRAL EXCISE ONLY WHICH IS APPLIED IN SERVICE TAX ALSO,

INPUT CREDIT IS BARRED IN CASE OF EXEMPTION AVAILED.

Soumyen Sarkar (free) (102 Points)
Replied 06 March 2011

The Cenvat Credit Rules covers both Central Excise and Service Tax credits i.e for input and input services. The percentage of taking credit is is only applicable in case of credit on capital goods, where only 50% of credit can be taken in the year of procurement of the goods and the rest 50% in any subsequent financial year. You can refer to rule 4 of Cenvat Credit Rules 2004 where the manner of taking credit is given You can also refer to Rule 2 (i) of CenvatCredit Rules 2004 for definitions of input and input services.