Order of utilization of cenvat credit

1348 views 2 replies

anony

MANAGER

145 Points Posted on 10 May 2012

DEAR SIR,

WE ARE A KRAFT PAPER MANUFACTURING COMPANY & ARE ELIGIBLE FOR CENVAT CREDIT OF EXCISE DUTY PAID ON RAW MATERIAL, CAPITAL GOODS & SERVICE TAX PAID.

I WANT TO KNOW IF THERE IS ANY SPECIFIC ORDER IN WHICH THESE CREDITS ARE REQUIRED TO BE UTILIZED I.E. WHICH OF THESE MUST BE UTILIZED FIRST & IF SOME CREDIT REMAINS UNUTILIZED IN A MONTH, WHICH OF THESE SHOULD BE CARRIED FORWARD TO NEXT MONTH.

PLZ REVERT BACK.

REGARDS,

LALIT DHABRIA

Replies (2)

Giridhar S Karandikar

Team Lead

7558 Points Posted on 10 May 2012

In relation to capital goods cenvat credit can be utilised to the extent of 50% of the excise duty paid during the first year. From subsequent year onwards, it can be utilised as & when requried. there is no such order of utilization of cenvat credit, as the total credit is debited to the Cenvat Credit Receivable A/c & is utilised as & when excise duty becomes payable. the balance credit is c/f to the subsequent month.

U S Sharma

glidor@gmail.com

21068 Points Posted on 10 May 2012

Follow your ER1, and check the credit account balance, there you have to take credit of all in single account, subject to ceiling of 50% of capital goods in 1st year, and accumulated balance is used or carried forward, no specific segregated account is needed to be maintained,

if you are taxable service provider also then you have to maintain ST-3 and you can not take credit of service tax which is used in taxable services, but it will go in ST-3 in place of ER-1