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CENVET CREDIT

CA Babit Khurana (learning is my passion) (338 Points)

14 September 2010

Dear Sir's / Friends

Q1. I am little bit confuse the treatment of taking CENVAT credit under Exise Act, 1944?

Q2. What is PLA in exise?

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3 Replies

R.P.Singh (Advocate & Consultant) (1173 Points)
Replied 15 September 2010

1. Normally the term ‘Cenvat’ is used to refer to provisions in respect of credit of Excise duty paid on inputs and capital goods and service tax paid on input services, which is available for payment of the excise duty on final product and service tax on output services.

As per Sec 2A of CEA, the term Cenvat can and does mean excise duty also.

2. Personal ledger account (Current Account). Assessee should pay duty through account current. Any assessee who has obtained 15 digit ECC number from Superintendent of Central excise can operate a current account.

CA Babit Khurana (learning is my passion) (338 Points)
Replied 15 September 2010

Thanx for your gesture sir.

But can you explain with an example which amount is come in PLA for payment, Is it duty collected on sale minus duty paid on purchase.

Q 1 And who is liable to maintain this account.

Q2 Who can take credit of exise duty whether a seller of final product can charge exise duty in his sale bil

if no then is it part of purchase?

Pl clearify my doubts

Thanx in advance

R.P.Singh (Advocate & Consultant) (1173 Points)
Replied 16 September 2010

Dear Babit

Let, you are going to pay excise duty Rs, 120 in your Return. And in Your Cenvat Account has 100 Rupees. Then you can utilise 100 Rs from Cenvat and Rest Rs.20 you have to pay through PLA.

The PLA is credited when duty is deposited in bank by GAR-7 Challan.