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cenvat

praveen (accountant) (57 Points)

25 August 2018

as per rule when asset increases , it is debited but when cenvat credit increase why is it credited?

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Rohit Tibrewal (Student & Senior Accountant) (3193 Points)
Replied 09 September 2018

When CENVAT credit credited, please come up with journal entry. We can take GST now.

Asset..... Dr.
GST........ Dr.
To Supplier A/c.

Please get it properly.

If it comes in Credit, it comes with negative value. At yhe time of input.

At the time of output it is being credited.

Vinod Babu (24196 Points)
Replied 09 September 2018

Credit means claim of set-off of something paid earlier. Cenvat credit means use of excise duty, service tax and custom duty (which is paid on input, input services and capital goods) paid earlier against service tax and excise duty payable on rendering of services and clearance of manufacturing of goods. Cenvat Credit Rules 2004 deals with credit of service tax and excise duty. It means service tax and excise duty are interchangeable ie. to pay excise duty one can use the input of service tax or input excise and vice versa.

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