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Cenvat credit utilisation

CA Arun Kumar (Chartered Accountant) (36 Points)

27 May 2012

We having both central excise and service tax in our factory. In the year there is no excise sales but excise purchase is there. can we claim the cenvat credit on excise purchase on payment of service tax payable

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2 Replies

Anupreksha Thote (CA) (285 Points)
Replied 27 May 2012

If you are using excise input purchases are used to provide output services you can use excise credit to pay your service tax liability

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Sunil Kumar G (AGM Taxation) (373 Points)
Replied 28 May 2012

Input as defined under rule 2 (k) of Cenvat Credit Rules 2004 as " (iv) all goods used for providng any output service". So input used for providing outpur service is eligible for CENVAT Credit.

under Scheme of CENVAT Credit, the person who is liable to service Tax on service provided to him (output service) can setoff this liability by claiming credit for the amount duties and cess he has paid on the goods (input goods as well as capital goods) he used and also the amount of service Tax and cess he has paid on the service he used (Input service) to provide such taxable service.