Hello Friends,
Is there any additional benefit, if a company, whether it is service or manufacturing sector adopts CENVAT credit?
For example, if a Company purchased a capital asset cost Rs 1.20 lacs, which includes Rs 0.20 lacs excise portion. Now the Company can set off the exice portion against its output service tax or output duty as the case may be.
But the Company can not claim depreciation as per Section 32 of Income Tax Act on the excise portion, and rule 4(4) of the Cenvat credit rules 2004 also states the same condition.
Same rule is applicable to revenue expenditure also.
Then, what kind of additional benefit can the Company avail, if it is adopts cenvat credit?
Kiran Kumar V
CAclubindia
