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Excess Availment of CENVAT Credit

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CA.G.Muguntha Narayanan

Internal Auditor at TVS Motors

2195 Points Joined January 2010

Hi to all, my query is as follows, A has taken CENVAT credit of Rs.10000(Based on Excise Invoice) during 2007. However he has paid only Rs.6000/- to his supplier. Hence there is an excess availment of credit to the extent of Rs.4000/-.(As per Excise Invoice ED Is Rs.10000/-) What i feel is that Rs.4000/- must be paid to the supplier. If this is done, there would be no excess availment

Replies (1)

P.Bashista

Advocate

367 Points Joined July 2009

In case of Excise invoice if the purchaser has not paid even a single penny to the seller, once a excise invoice is issued the purchaser is eligible for the cenvat credit. So whether the seller has received only Rs. 6000/- or Rs. 10000/- is irrelavent.

But in case of Service tax the credit can be availed only in reciept of the payment.