09 October 2011
The company has manufactur ceramic tiles(excisable goods) from proceesed body clay (exempted goods). In addittion to that company has sold the proceed body clay as such.
The company has availed cenvat credit on input service for both the goods i.e. ceramic tiles and body clay.
So kindly advice that wheter company has rightly availed cenvat credit on input service in relation to body clay powder removed as such from factory.
09 October 2011
Sir Can u plz. tell me the section, chapter and para under which it has been specifically mentioned that its eligible for proportionate availment.
Further is there any condition which needs to be fulfilled by the assessee to avail such input service credit
09 October 2011
Rule 6(3) and Rule 6 (3A) of Cenvat Credit Rules, 2004 deals with above suituation.
As per these rules assesse has the option to maintain separate records for input or input services used for exempted goods or services or taxable goods or services and accordingly pay an ampount equivalent to cenvat credit attributable to input and input services used in manufacture or provision of exempted goods and services. (See Rule 6(3A))
On the other hand i.e. when assessee opted not to maintain separate record, assessee has to pay an amount equivalent to 5 % of sale price of exempted goods and value of exempted services. (see rule 6 (3)).
In both the above cases, assessee can avail and utilise cenvat credit but has to pay amount calculated above at the time of removal of final goods and provision of output service.
CAclubindia
