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Cenvat credit

Vinay Gupta (AM) (103 Points)

15 July 2016

My Question is ; I have a cenvat credit available of Rs 100. But I am providing taxable as well as exempted service. So I can utilise only Rs. 20. In the return I have showed credit availed Rs. 20 and utilised Rs. 20, instead of showing credit availed Rs. 100, utilised Rs. 20 and reversed Rs. 80. Now department is saying reverse credit as per ratio on Rs. 20 and pay the difference along with interest. Can this be saved?

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7 Replies

CA Saurabh Singh (Practising Chartered ) (974 Points)
Replied 15 July 2016

Hello Vinay,

Please clarify the department order of reversal in ration of Rs.20

Vinay Gupta (AM) (103 Points)
Replied 15 July 2016

Hello Saurabh,

It an audit. They have completed the audit and saying to reverse the cenvat on basis of Rs. 20 as you have shown cenvat availed as Rs. 20 only.

CA Saurabh Singh (Practising Chartered ) (974 Points)
Replied 15 July 2016

But, you have reversed Rs 80, reversal can be made on as per Rule 6 of CCR as per following:

1. If you maintain seperate books of account for exempted and taxable services, reverse for exempted.

2. if not then you have to make proporionate reversal as per various method prescibed , on e of them is reversal of 6% of value of exempted service sprovided