CENVAT RECORDS & ACCOUNTING

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aditya (Querist)
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24 January 2009 Hello All,
Can you please help me with your expert advice on the following? :
My company is installing a pipeline and related other plants & machineries for transportation of chemicals. Pipes have been purchased for the purpose and stored. The installation process has just started and operationalisation of the plant including the pieline will take at least one year.
After operationalisation service tax will be applicable transportation charge for "Transportation of goods through Pipelines".
Please advise me -
(1)whether CENVAT Credit for ED paid on pipes and other plants, Srvice Tax paid to Project Consultants and other service providers for implementation of the project will be available for adjustment against Service Tax Chargeable on Transportation Charge?
(2)If so, what records and in what format do I need to maintain to satisfy the central excise/service tax authorities to avail CENVAT credit?
(3)When should I claim the CENVAT credit and what is the procedure for the same?
(4)How should I treat the ED and Ser. Tax paid during construction activities in my books of accounts for claiming and utilisation of CENVAT credit? Can you please suggest me appropriate entries in the books of accounts?
It will be a great help.

Thanks & regards,

Aditya

Dayal

Dayal (Expert)
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25 January 2009 Hi,

Firs check whether all the expenses would be capitalised, If yes cenvat portion need not be capitalised. Moreover, 50% credit in first financial year and 50% in subsequent year can be availed. Yes you can take cenvat credit for all the inputs and services.

Following is the list of documents and procedure one has to follow:

•Maintain proper documents of all input credit such as Original Invoice
•Details of the input service provider (like the registration number and address of the service provider)
•Details of the value and description of the input services
•Details of the input credit (Cenvat Input Service Register)
•Details of the opening and closing balance of the input credit

Should you need for clarification do let me know

aditya

aditya (Querist)
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04 February 2009 Dear Mr. Dayal,

Thanks for your reply. However, I am still not clear about points (3) & (4) of my query. Could you please guide me.
Further, I have already filed ST-3 for the half year ended Sep.'08. Althogh, a substantial amount of ED was paid on inputs purchased for project implementation but for want of knowledge of the subject,the CENVAT Credit was not claimed for ED paid. However, a note was added at the end of the ST-3 form stating that credit of ED paid will be claimed upon utilising the inputs in project activities and will be utilised upon commencement of operations.
Is my approach correct or I need to file a revised ST-3 claiming credit? The project is likely to commence operations end of 2009. Will credit for entire ED & Ser.Tx paid on various goods & services during the construction period which going to be of almost 2 years be available for utilisation?

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