Cenvat Credit

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This query is : Resolved

ramesh vadnala (Querist)

09 July 2010 We are mfrs in ap, constructing factory (still under progress), purchasing plant & machinery, equipments & taking consultancy services & others.
can we take credit of eligible excise duty & service tax and suggest accounting entries.

Shyam Lal Naik

Shyam Lal Naik (Expert)

09 July 2010 I think yes. You are eligible to take Cenvat Credit. You may refer to the following judgment. In this case, the manufacturer was allowed the Cenvat on input services, utilised for construction of a new factory.

2009 (14)S.T.R. 692 (Tri.-Ahmd.)

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)

09 July 2010 Agreed, You can take cenvat credit & service tax.
You have to make entry as below

For Buidling bill
Building Under Construction Dr.
Service tax to be availed Dr.
Ed cess on Service tax to be availed Dr
H.E. Cess on service tax to be availed Dr
To Contractor.
( It will be availed after payment on bill )
i.e entry will be made

Service Tax availed Dr.
Cess on Service tax availed Dr.
H.E.Cess on service tax availed Dr
To Service tax to be availed Cr
To cess on Service tax to be availed Cr
To H.E. Cess on service tax to be availed

For Plant & machinery
Plant & machinery Dr
Cenvat on Capital goods availed Dr
Cenvat on Capital good to be availed 50% DR
Cess on Capital Good availed Dr
Cess on Capital Goods to be availed 50% Dr
H.E.Cess on Capital good availed Dr
H.E.cess on Capital Good to be availed50%dr
To Supplier

i.e You have to t/f cenvat/service tax to respective accounts .
When you have to pay duty, then use it.

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