Mohit (CA) (755 Points)
10 April 2014Hi guys,
Is there any difference b/w Cenvat Credit availed and Cenvat Credit utilised? Or are both the same? I read a case law CCEx vs Bombay Dyeing, where it was held that assesee will be entitled to expemtion notification even if he at first had availed Cenvat Credit provided Cenvat Credit is reversed before utilisation. What does that mean?
Will be really glad if someone helps on this.
Shudhanshu Agrawal
(Business)
(2570 Points)
Replied 10 April 2014
Cenvat credit availed and cenvat credit utilised are two different concepts. Let us understand one by one.
Cenvat credit availed : When you pay VAT/Excise duty on inputs/ capital goods, you pass a journal entry by debiting cenvat credit input on goods/capital goods. It is called cenvat credit availed. In this case you consider cenvat credit a current asset and not an expense.
Cenvat credit utilised: When you require to make payment of VAT/Excise/ST liability then you can use this cenvat credit availed for payment of liability by crediting it. It is called utilisation of cenvat credit.
In other words we can say that availed word is related to recognisation of cenvat credit and utilised word is related to use of cenvat credit for payment of liability.
Mohit
(CA)
(755 Points)
Replied 10 April 2014
Thanks Shudhanshu :) So can we say CC availed is just making a Book entry in Books as a Current asset and utilising CC is crediting that account.
vishal
(ertertert)
(27 Points)
Replied 21 May 2017
Please solve following query, cenvat credit Rules,2004:
If we refer to R-3(4): CCR (cenvat credit) can be utilized for the payment of an amount equal to CCR taken on Inputs/cap guds, if such inputs/cap guds are removed as such; Plz give proper example for above.Also tell if we, at the time of buying Inputs/cap guds, already paid Input Duty, then why we need to pay back the same at time of such removal? Dont we just need to credit it at time of removal in our books?
Plz answer the above by relating to R3(5) also with example
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