Excise duty and cenvat credit

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Dixita parmar (Querist)
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30 October 2013 How to calculate the excise duty and cenvat credit with servicetax??? and how the cenvat credit is available while paying service tax please explain.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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30 October 2013 Calculation of duty and calculation of CENVAT credit are two different activities. Calculation of duty CE as per Central Excise Tariff on the specified products and service tax on the specified service @12.36% after availing of abatements wherever available. This pertains to the calculation of Duty.

The duty payable may either be paid in cash - GAR-7 challan / PLA Register for Central Excise or by utilization of CENVAT credit. CENVAT credit is the Excise Duty / Service Tax paid on the Input Goods or Services utilized for the purpose of producing the taxable product or rendering the taxable service. Certain specified goods / services are expressly excluded from the definition of Input Goods / Services e.g. High Spped Diesel used in manufacturing, Service Tax paid on Rent-a-Cab Services, etc. Duty paid on such excluded items cannot be treated as Input and hence no CENVAT credit will be available.

A numerical example: Suppose the raw materials, carriage, etc. are dutiable - cost Rs.100/- Duty@10% Rs.10/-. Cost of product at point of clearance - say factory gate Rs.120/- Duty @ 12% Rs.14.40. The assessee will utilize the duty paid on input products and services of Rs.10/- to pay part of the duty and the balance Rs.4/40 will be paid either by GAR-7 Challan or by Debit to the credit balance in the PLA Register.

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Dixita parmar

Dixita parmar (Querist)
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31 October 2013 ok.but in case of the manufacturer is outside service provider then if he has paid the service tax on input service like insurance,telephone,then he is eligible for credit or not????

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