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Wrong availment of cenvat credit

755 views 3 replies

Dipesh

Executive

1021 Points Joined December 2013

we taken wrong cenvat credit in the month of July 2014 and make duty payment but now we noticed that this credit is wrong, and we make debit entry... is it sufficient for settlement or we need to pay interest on credit amount???? the credit amount is approx Rs.40000/-

Replies (3)

R P Ananthakumar

Sr. Officer - Central Excise/Cash

514 Points Joined August 2010

Dear Mr.Dipesh,

You need to pay interest @ 24% per year for that wrong credit.

Regards

RP Ananthakumar

Manoj Agarwal

Service Tax Consultant Rourkela Service

3456 Points Joined March 2012

As per the amendment in Rule 14 of Cenvat Credit Rules, 2004 vide N/N-18/2012 w.e.f. 01-04-2012, the wrong credit along with interest is recoverable only if the credit has been taken AND utilized wrongly. So, if the wrong credit has been availed but not utilized, no need to pay interest.