Where to show reversal of cenvat in st3?
This query is : Resolved
17 April 2014
Hello all
The assessee is a service provider involved in giving machines on hire. He had purchased machinery on which CENVAT input was taken on Excise duty paid and input was utilised against payment of Service tax as per law.
Now he has sold the machinery and proportionate CENVAT credit is to be reversed. We charged the amount in the bill and deposited the amount in cash through Challan to the govt.
Now the issue is that there is no specific column in ST3 where we can show this amount.
The only place where the reversal of CENVAT on capital goods is mentioned is in column I 3.1.3.5 but it takes amount only if there is CENVAT input in the current period, which in this case is NIL.
If we show the amount in Gross receipts column, it is technically wrong because no services were rendered and the returns will not match with P&L A/c for the year.
Kindly advice.
The assessee is a service provider involved in giving machines on hire. He had purchased machinery on which CENVAT input was taken on Excise duty paid and input was utilised against payment of Service tax as per law.
Now he has sold the machinery and proportionate CENVAT credit is to be reversed. We charged the amount in the bill and deposited the amount in cash through Challan to the govt.
Now the issue is that there is no specific column in ST3 where we can show this amount.
The only place where the reversal of CENVAT on capital goods is mentioned is in column I 3.1.3.5 but it takes amount only if there is CENVAT input in the current period, which in this case is NIL.
If we show the amount in Gross receipts column, it is technically wrong because no services were rendered and the returns will not match with P&L A/c for the year.
Kindly advice.
03 August 2025
In Service Tax Return (ST-3), reversal of CENVAT credit on sale of capital goods (machinery) needs to be reported properly, but it’s a known issue that the ST-3 format does not have a dedicated column explicitly meant for such reversals when there is no CENVAT credit taken in the current period.
Here’s how you can handle this situation:
How to show reversal of CENVAT on sale of machinery in ST-3?
Column I (3.1.3.5) — CENVAT Credit taken on Capital Goods
This column accepts CENVAT credit amount availed in the current period. Since in your case no input was taken in this period, you cannot show reversal here.
Showing reversal of CENVAT credit:
The amount of reversal of CENVAT credit on sale of machinery is not an output service but a reversal of credit.
Technically, you should not include this in Gross Receipts or Service Receipts since no service is rendered.
Best practice:
Report the reversal amount as part of “Other Service Receipts” or a suitable miscellaneous head in Column A (Gross Receipts) with a proper explanation in the annexure (if allowed).
Deposit the reversal amount in cash (which you already did) and maintain proper documentation.
Disclosure in audit and P&L:
Explain in your audit report or notes that this receipt is a CENVAT reversal on capital goods sale and does not pertain to service revenue.
Alternative:
Some practitioners show the reversal amount in “Other Receipts” or “Miscellaneous Income” for reconciliation purposes, but clarify with your auditor.
Summary:
What you want to show Where in ST-3 (practical) Notes
Reversal of CENVAT on machinery sale Include under Gross Receipts (Column A) with proper remarks No specific column in ST-3 for reversal when no credit taken currently; disclosure needed
Additional advice:
Keep all relevant challans, invoices, and calculation worksheets ready for audit.
Consult with your auditor for specific reporting format as ST-3 was more of a compliance form with limited flexibility.
From July 2017 onwards, GST replaced service tax, so this is applicable if dealing with older periods.
Here’s how you can handle this situation:
How to show reversal of CENVAT on sale of machinery in ST-3?
Column I (3.1.3.5) — CENVAT Credit taken on Capital Goods
This column accepts CENVAT credit amount availed in the current period. Since in your case no input was taken in this period, you cannot show reversal here.
Showing reversal of CENVAT credit:
The amount of reversal of CENVAT credit on sale of machinery is not an output service but a reversal of credit.
Technically, you should not include this in Gross Receipts or Service Receipts since no service is rendered.
Best practice:
Report the reversal amount as part of “Other Service Receipts” or a suitable miscellaneous head in Column A (Gross Receipts) with a proper explanation in the annexure (if allowed).
Deposit the reversal amount in cash (which you already did) and maintain proper documentation.
Disclosure in audit and P&L:
Explain in your audit report or notes that this receipt is a CENVAT reversal on capital goods sale and does not pertain to service revenue.
Alternative:
Some practitioners show the reversal amount in “Other Receipts” or “Miscellaneous Income” for reconciliation purposes, but clarify with your auditor.
Summary:
What you want to show Where in ST-3 (practical) Notes
Reversal of CENVAT on machinery sale Include under Gross Receipts (Column A) with proper remarks No specific column in ST-3 for reversal when no credit taken currently; disclosure needed
Additional advice:
Keep all relevant challans, invoices, and calculation worksheets ready for audit.
Consult with your auditor for specific reporting format as ST-3 was more of a compliance form with limited flexibility.
From July 2017 onwards, GST replaced service tax, so this is applicable if dealing with older periods.
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