Cenvat on telephone bills

Others 917 views 4 replies

we have to take cenvat on telephone bills of the co. on payment basis (the date when cheques has been drawn) or the date on which cheque is cleared. Say a cheque pf telbill is made on 28/06/2011 and it is cleared on 5/7/11 so cenvat has to be taken in June 2011 or  July 2011. pls tell me its urgent


Replies (4)

Strictly speaking payment entered in books of account. But in spirit it should be date of clearance.

Other views please 

Originally posted by : Shubham Singhal

we have to take cenvat on telephone bills of the co. on payment basis (the date when cheques has been drawn) or the date on which cheque is cleared. Say a cheque pf telbill is made on 28/06/2011 and it is cleared on 5/7/11 so cenvat has to be taken in June 2011 or  July 2011. pls tell me its urgent


 

 Payment made by cheque which is subsequently honoured & encashed, relates back to the date when the cheque has been delivered. This view has been confirmed in the judgement of Vardhaman Chemicals V. CCE (2003). So if you have submitted the cheque for payment on 28/06/11, Cenvat Credit is available on 28/6/11 provided the cheque get honoured on a later date. Criteria is not the date of cheque or when it cleared but the date when cheque has been delivered for payment (in you case I am assuming you have written the cheque on 28/06/11 and on the same date it has been issued to Telephone Service Provider.

Cenvat is available on payment basis. So as you have made the payment of  telephone bills. You are eligible for taking the Cenvat Credit of same.

Consequent to the Point of Taxation rules if you have opted for the same by 1.4.2011 then the bills after that date you can avail the credit on receipt of the bill. You need to ensure payment for the same is made within 3 months otherwise you require to reverse the credit.

if you have opted after 1.7.2011 for bills prior to that date the credit wouldbe available on payment basis only


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