in GTA cases due to reverse charge co. pays service tax and cess thereon in CASH always. WITh service tax i am okay...but i think a co. can pay thru input the cess payable on service tax( EXPLANATION TO Rule 3(7) CCR)
. i dont think there is an compulsion to pay the cess part in cash form... i.e 3% can be paid thru account. Correct me if i am wrong
RULES READ AS FOLLOWS
(7) Notwithstanding anything contained in sub-rule (1) and sub-rule (4), -
(a) CENVAT credit in respect of inputs or capital goods produced or manufactured, by a hundred
per cent. export-oriented undertaking or by a unit in an
in a Software Technology Park other than a unit which pays excise duty levied under section 3 of
the Excise Act read with serial numbers 3,5, 6 and 7 of notification No. 23/2003-Central Excise,
dated the 31st March, 2003, [G.S.R. 266(E), dated the 31st March, 2003] and used in the
manufacture of the final products or in providing an output service, in any other place in
case the unit pays excise duty under section 3 of the Excise Act read with serial number 2 of the
notification No. 23/2003-Central Excise, dated the 31st March, 2003, [G.S.R. 266(E), dated the
31st March, 2003], shall be admissible equivalent to the amount calculated in the following
manner, namely:-
Fifty per cent. of [X multiplied by {(1+BCD/100) multiplied by (CVD/100)}], where BCD and CVD
denote ad valorem rates, in per cent., of basic customs duty and additional duty of customs
leviable on the inputs or the capital goods respectively and X denotes the assessable value.
(b) CENVAT credit in respect of -
(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise
(Textiles
and Textile Articles) Act, 1978 (40 of 1978);
(ii) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14
of
2001);
(iii) the education cess on excisable goods leviable under section 91 read with section 93 of the
Finance (No.2) Act, 2004 (23 of 2004);
(iv) the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of
excise specified under items (i), (ii) and (iii) above;
(v) the additional duty of excise leviable under section 157 of the Finance Act, 2003 (32 of 2003);
(vi) the education cess on taxable services leviable under section 91 read with section 95 of the
Finance (No.2) Act, 2004 (23 of 2004); and
(vii) the additional duty of excise leviable under clause 85 of the Finance Bill, 2005, the clause
which has, by virtue of the declaration made in the said Finance Bill under the Provisional
Collection of
Taxes Act, 1931, the force of law,
shall be utilized only towards payment of duty of excise or as the case may be, of service tax
leviable under the said Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 or the
National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of
2001), or the education cess on excisable goods leviable under section 91 read with section 93 of
the Finance (No.2) Act, 2004, additional duty of excise leviable under section 157 of the Finance
Act, 2003, or the education cess on taxable services leviable under section 91 read with section
95 of the said Finance (No.2) Act, 2004, or the additional duty of excise leviable under clause 85
of the Finance Bill, 2005, the clause which has, by virtue of the declaration made in the said
Finance Bill under the Provisional Collection of Taxes Act, 1931 (16 of 1931), the force of law,
respectively,
on any final products manufactured by the manufacturer or for payment of such duty on inputs
themselves, if such inputs are removed as such or after being partially processed or on any
output service:
Provided that the credit of the education cess on excisable goods and education cess on taxable
services can be utilised, either for payment of the education cess on excisable goods or for the
payment of the education cess on taxable services.
Explanation.-For the removal of doubts, it is hereby declared that the credit of the additional duty
of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special
Importance) Act, 1957 (58 of 1957) paid on or after the 1st day of April, 2000, may be utilised
towards payment of duty of excise leviable under the First Schedule or the Second Schedule to
the Excise Tariff Act.
(c) the CENVAT credit, in respect of additional duty leviable under section 3 of the Customs Tariff
Act, paid on marble slabs or tiles falling under sub-heading No. 2504.21 or 2504.31 respectively
of the First Schedule to the Excise Tariff Act shall be allowed to the extent of thirty rupees per
square meter;
Explanation.- Where the provisions of any other rule or notification provide for grant of whole or
part exemption on condition of non-availability of credit of duty paid on any input or capital goods,
or of service tax paid on input service, the provisions of such other rule or notification shall prevail
over the provisions of these rules.
4. Conditions for allowing CENVAT credit.- (1) The CENVAT
CAclubindia
