EXPORTERS AND STUDENTS UNDERSTOOD TO

EXPORTERS AND STUDENTS NDERSTOOD TO CENVAT

 CENVAT (Central Value Added Tax) credit is the set off of the duty paid on inputs and capital goods and also service tax paid on input service against the Excise duty

On final products or service tax o input service.

 IT IS CLEAR FROM AN Example:-

 1. Purchased Raw Material (inputs)       Rs.1100.00 (1000.00+100)

  (Includes 10% Tax paid on it i.e.  Rs. 100.00

2. Value addition                        Rs.2000.00

3. Total (1+2)                           Rs.3100.00

4. Excise Duty on (3) above, Say 20% i.e Rs. 620.00

If Cenvat (AVAIL) credit, is there,

Cost of Product= [(1100-100) +2000+ 20 %( 1000.00+2000) =3600.00

If Cenvat (NOT- AVAIL) credit, is not there,

Cost of Product= [1100+2000+ {20} %( 1000+2000)] =Rs.3720