Cenvat credit more than payment amt

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This query is : Resolved

Kamlesh Chokhani (Querist)

09 July 2010 Dear All

AS per our PO terms and condition any statutory variation after contractutal delivery date ( CDD) is to be borne by seller

The rate of basic excise duty has been changed from 8% to 10% wef 26.02.10.

As per PO terms , in cases where CDD was on or prior to 26.02.10 but material dispatched after that that ( eg in March). Seller is giving us invoice of 10% excise duty but we are paying him only 8% as per PO terms

Query is whether we can take the credit of whole 10% in such cases or not or it will be restricted to payment amount of 8%.

Please advise with relevenat laws, if any..

Thanks and Regards

Kamlesh Chokhani

Shyam Lal Naik

Shyam Lal Naik (Expert)

10 July 2010 In case of inputs and capital goods, there is no requirement that the tax must be paid to be eligible to take credit.

Once the inputs/capital goods are received at your factory, supported by the invoice, you are eligible, not withstanding whether payment is made in full subsequently.

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