Central Excise CENVAT Credit
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Transcript of Central Excise CENVAT Credit
Central ExciseCENVAT Credit
Rajesh Choudhary
CENVAT Credit
Rajesh Choudhary
What to avail
When to avail
How to avail
How much to avail
How to utilize
Rule 2 & 3
Rule 4
Rule 9
Rule 6 & 7
Rule 3
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CENVAT Credit
Rajesh Choudhary
Inputs Capital Goods Input Services
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CENVAT Credit Motor Vehicles
Applicable from April 01, 2012
Trucks & Lorries
Cars & CabsMotorcyclesBus
Specified Motor Vehicles
their BodiesRajesh Choudhary 04/21/23 4
CENVAT Credit Motor Vehicles
Specified Service Providers
Courier Service,Tour Operator Service,Rent-a-Cab Service,Cargo Handling Service,Transport of Goods by Road,Outdoor Caterer Service,Pandal or Samiana Service
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CENVAT Credit Motor Vehicles
As Capital Goods
Specified Motor Vehicles + Other Motor Vehiclesto
Specified Service Providers
Other Motor Vehiclesto
All Service Providers
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CENVAT Credit Motor Vehicles
Input Service of Rent a Cab/Hiring
Specified Motor Vehicles + Other Motor Vehiclesto
Specified Service Providers
Other Motor Vehiclesto
All Service Providers
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CENVAT Credit Motor Vehicles
Input Service of Repair/Insurance
Specified Motor Vehicles + Other Motor Vehiclesto
Specified Service Providers + Manufacturer/Insurer
Other Motor Vehiclesto
All Service Providers + Manufacturer/Insurer
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CENVAT Credit RulesCapital goods
removed after use or removed as scrape/wasteApplicable from 17.03.2012
CENVAT Credit to be reversed
Higher of(A)Total CENVAT Credit on Capital GoodLess2.5% CENVAT Credit for each Quarter or part from date of taking Credit
(B)Duty on transaction value
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CENVAT Credit Document
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Refund of CENVAT CreditRule 5 redrafted
Rajesh Choudhary
Refund amount =
Export turnover of services
Net CENVAT CreditX
Total turnover
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Refund of CENVAT CreditValue of Export Service
Rajesh Choudhary
2009-10For
2010-11 2011-12
Payments received for 2010-11
+Exports completed
-Advance for Exports
Advance for Exports
Exports to be completed
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Refund of CENVAT CreditTotal turnover
Export turnover of Service+
Inputs removed as such not capital goods
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CENVAT Credit RulesStandard ratio of reversal in Rule 6(3)(i) enhanced from 5% to 6% (April 01, 2012)
Calculation of reversal ratio Rule 6(3)(ii)
Exempted Service Turnover
Total Service Turnover
Rajesh Choudhary
CENVAT Credit
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Value of Service
Rajesh Choudhary
Service taxed @ normal rate
&
Service taxed under abatement
Value as per Section 67
Service taxed @ special rate
Tax @ special rate Grossed up by Normal Rate
Trading
a)10% of COSor
a)Sale price less COS
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SampleProfit & Loss A/c
Rajesh Choudhary
Commission on sale of air tickets 100 L(taxed paid on basic fare)
Tour operations 20 L(packaged tours)
Outbound tours 30 L(payment in Forex)
Trading of goods 50 L
Commission toSub agents 70 L
Cost of local tour packagespurchased 15 L
Cost of outbound tourspurchased 25 L
Cost of goods purchased 48 L
Overheads 50 L
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Value of Commission Income Taxable Service
Commission Income 100 LBasic Fare 50 L
Service Tax @ 0.6% 50L X 0.6% 30000
Value30000 X 100/10 3 L
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Value of Tour OperationsExempted Service
Tour Operations Income 20 L
Service Tax @ 10% on 75% value20L X 75% X 10% 1.5 L
Value 20 L
Value of Outbound toursTaxable Service
Export of Services 30 L Rajesh Choudhary 04/21/23 18
Value of Trading Income Exempted Service
Trading Income 50 LPurchases 48 L
Cost of Sales 45 LOpening Stock 0+ Purchases 48 L - Closing Stock 3 L
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Value of Trading Income Exempted Service
Higher of (a) and (b)
(a)Sales less COS50 L – 45 L 5 L
(b) 10% of COS45 L X 10% 4.5 L
Value 5 L
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CENVAT Credit eligible
Rajesh Choudhary
Commission to Sub agents 70 L (35 L X 0.6%) 21000
Cost of local tour packages 15 L (15 L X 75% X 10%) 112500
Cost of outbound tours 25 L Nil
Cost of goods purchased 48 L Nil
Overhead (50 L X 10%) 50 L 500000
Total Credit 521000
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How much to avail
Exempted Services 25 LTrading & Tour operations
Taxable Services 33 LCommission & Outbound Tours
CENVAT Credit allowed
521000 – {25 L/(33 L + 25L) X 521000}= 296431
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Input Service Distributor
Rajesh Choudhary
Common Credit
Pro rata basis
Credit related to exempted unit
No distribution
Credit exclusively related to one unit
No distribution to other units
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CENVAT Credit Rules
Purchased in 2009 Credit availed by CA 10 L
No tax liability till2012
EarlierCredit to be reversed
with Interest
NowCredit to be reversed
without Interest
Applicable from 17 March 2012Rule 14
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Reverse Charge
Applicable from date to be Notified
After enactment of Finance Bill, 2012
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Reverse Charge
TelecommunicationGeneral Insurance AuxiliaryInsurance Auxiliary Service
by agentImport of ServiceGoods Transport Agency ServiceMutual Fund DistributorsSponsorship Service
Earlier Now
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Reverse Charge
by Individual Advocates
Service
toBusiness Entity
Tax Nil 100%
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Reverse Charge
by Arbitral Tribunal
Service
toBusiness Entity
Tax Nil 100%
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Reverse Charge
by Government/ local authority
Support Service
toBusiness Entity
Tax Nil 100%
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Reverse ChargeRent a Cab Service
toBody Corporate
Tax (abetment) Nil 100%
byIndividual/ proprietary firm/HUF
byPartnership firm/LLP
Tax 60% 40%
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Reverse ChargeManpower Service
toBody Corporate
byIndividual/ proprietary firm/HUF
byPartnership firm/LLP
Tax 25% 75% Rajesh Choudhary 04/21/23 31
Reverse ChargeWorks Contract Service
toBody Corporate
byIndividual/ proprietary firm/HUF
byPartnership firm/LLP
Tax 50% 50% Rajesh Choudhary 04/21/23 32
CENVAT Credit Document
Credit allowed on
Invoices
+
Challans used for payment of Tax under Reverse Charge
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New Abatement & Valuation Scheme
Applicable from
date to be Notifiedenactment of Finance Bill, 2012
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New Abatement & Valuation Scheme
Rajesh Choudhary
Works Contract Service
Composition Scheme@ 4.8% + Cess on full value
Value = Gross Amount
lessSale of/
Transfer in property
Exemption
Original work 60%
Completion work 40%
Land included 75%No Credit of Inputs
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New Abatement & Valuation Scheme
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Existing Abatement
90
70
NA
Proposed Abatement
90
70
70
Financial Leasing Service04/2006
Transport of Goods by Rail
Transport of Passengers by Rail
CENVAT Credit of Inputs, Capital Goods and Input Services Allowed
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New Abatement & Valuation Scheme
Rajesh Choudhary
Existing Abatement
40
3070 50
Proposed Abatement
30
306040
• Convention center/Mandap + Catering• Pandal + Catering• Restaurant• Outdoor Catering
Credit of Capital Goods and Input Services AllowedInputs (food items) not allowed
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New Abatement & Valuation Scheme
Rajesh Choudhary
Existing Abatement
50
NASlabs
deleted
Proposed Abatement
40
60 01.04.2012
• Hotels
• Airlines
Credit of Input Services AllowedInputs & Capital Goods not allowed
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New Abatement & Valuation Scheme
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Existing Abatement
75603025
Proposed Abatement
75603050
• GTA• Rent a Cab• Chit Fund• Goods by Vessel
Credit of Capital Goods, Input Services and Inputs not allowed
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New Abatement & Valuation Scheme
Rajesh Choudhary
Existing Abatement
75
90
60
Proposed Abatement
75
90
60
• Tour & TravelPackage Tour
Hotel Accommodation
Unpackaged Tour
Credit of Capital Goods, Input Services and Inputs not allowed
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Rajesh Choudhary
CHOUDHARY & ASSOCIATESCHARTERED ACCOUNTANTS
9987699427