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CENVAT Documents & Related Issues

Service Tax - By: - CA.Sandeep Baheti - Dated:- 1-4-2015 - CENVAT Documents and Related Issues By CA Sudhir VS and CA Sandeep Kumar Baheti Background: MODVAT scheme came into existence in 1986 and over a period of 28 years lot of amendments took place, even got renamed as CENVAT, which became effective from 01.04.2000 late the cross availment of credit with service tax and central excise was introduced with effective from 10.09.2004.CENVAT scheme was mainly introduced to avoid cascading effect .....

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l receipt of Inputs and Capital Goods in the factory of manufacturer/ premises of Service provider with specified duty paying documents and input service received with prescribed invoice after receipt of service or on receipt of advances for the services to be provided. Since the CENVAT can be availed on duty paying document, such documents plays a very vital role in availment of the credit, in the opinion of the paper writer the document on which the credit is being availed is as goods a curren .....

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or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer or inputs or capital goods as such. An invoice issued by a first stage dealer or a second stage dealer, as the case may be, in terms ofthe provisions of Central Excise Rules, 2002. A supplementary invoice, or a bill or a challan or any other document evidencing payment of additional amount of duty, issued by a manufac .....

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or Customs Act,1962 or Finance Act, 1994 or the rules made thereunder with an intent to evade payment of duty). A bill of entry,a document which is used for paying customs duty, which is a declaration by an importer or exporter of the exact nature, quantity and value of goods that have landed or are being shipped out which is being prepared by a qualified customs clerk or broker andexamined by customs authorities for its accuracy and conformity with the tariff and regulations. Acertificate by .....

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h parcels or packets must be detained. The duties as assessed by the Customs Appraiser are noted in the Parcel Bill or letter mail bill and the same shall be recovered by post office from the addressee at the time of delivery along with fine and penalty if any. The credit for the total amount of duty certified by the Customs Appraiser at the end of each bill is given by the Post Office to the Customs Department in accordance with procedure prescribed there under. A service tax certificate for T .....

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ST dated 20.06.2012 the service recipient has been made partially or fully liable to make the payment of service tax, challan paid to this extent is an eligible document to availe the credit) An invoice, a bill or challan issued by a provider of input service on or after the 10th day of, September, 2004. An invoice, bill or challan issued by an input service distributor under rule 4A of the Service Tax Rules, 1994. However it is to be noted that the credit of additional duty of customs levied .....

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tant to note that Rule 9(2) requires that a document on which the credit is being availed should be having all the particulars as prescribed under the Central Excise Rules, 2002 or the Service Tax Rules, 1994, as the case may be, are contained in the said document. As per Rule 4A of Service Tax rules, 1994, a service invoice should contain the following particulars: Particulars Requirement of content Invoice No. and date Mandatory .....

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As per Rule 11 of Central Excise Rules, 2002 a document on which CENVAT credit is taken shall contain the following particulars: Particulars Requirement of content Invoice No. and date Mandatory Registration Number Mandatory Address of the concerned Central Excise Division Not mandatory, credit can be allowed at the discretion of AC/DC as per proviso to Rule 9(2) of CENVAT Credit Rules, .....

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lowed at the discretion of AC/DC as per proviso to Rule 9(2) of CENVAT Credit Rules, 2004 Mode of transport and vehicle registration number Not mandatory, credit can be allowed at the discretion of AC/DC as per proviso to Rule 9(2) of CENVAT Credit Rules, 2004 Rate of duty Mandatory Quantity and value of goods and the duty payable thereon Mandatory In case of a proprietary concern or Hindu Undivi .....

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eived and accounted for in the books of the account of the receiver. The procedure to be followed in this regard is as follows: Intimation shall be given to the Assistant Commissioner or Deputy Commissioner containing the details like- The background of the assessee or profile of the company Details of goods manufactured and output service(s) provided by the assessee Details of majorly required inputs and input services for the provision of above mentioned service(s)or manufacture of goods. .....

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er person like by obtaining declaration from a Chartered Accountant or any other competent person. If the Assistant Commissioner or Deputy Commissioner is satisfied, then he may allow the CENVAT Credit on the same. We shall proceed to discuss some of the common issues that arises while availing CENVAT credit Most of my purchases are from VAT Dealers. Can I get CENVAT Credit on the goods purchased from VAT Dealers? In many cases it is observed that goods purchased from VAT dealers under VAT invo .....

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VAT invoice the credit of ₹ 20 already paid as excise duty is not available to the buyer. Therefore such buyer ends up paying the excise duty but not in a position to availed the same due to lack of the prescribed document. In such a case, CENVAT credit of excise duty already paid on such goods can be availed by the buyer under the following circumstances: By making the VAT dealer to register under excise/ service tax as first stage dealer or second stage dealer and pass on the credit by .....

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r excise invoice to Dealers and Dealers issues VAT invoice to buyers (mostly Dealers are not registered under Excise/service Tax). CENVAT can still be availed by buyer by linking chassis number (which will be unique number)displayed on VAT invoice with chassis number referred on excise invoice, which needs to be obtained from Dealer. This is possible only if dealer is not availing CENVAT on the invoice obtained from manufacturer and he is ready to share excise invoice along with VAT invoice. Ca .....

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quirement to register will be within 30 days from the date of providing the service and in case of manufacturing unit, if unit is availing SSI exemption after crossing 150 lakhs of turnover. So registration will take place later however expenses will incurred before requirement of registration arises, in such cases, CENVAT Credit paid on the procurement of capital goods and services can be availed is a big time question? Yes, the CENVAT Credit before commencement of business can also be availed .....

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n the invoices issued in the old name of the company? Many a times we see the companies/ organization will apply for the change in name of the company/ organization, for example, motor vehicle giant, Hero Honda changed its name to Hero Motor Corp, in such cases, most of the time we see that invoices are still received in the old name of company, may be because of any reason like master file in database not updated etc.., in such cases, CENVAT Credit on those invoices can be availed by the compan .....

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(P) Ltd Vs CCE Faridabad, Service Tax 2011 (7) TMI 909 - CESTAT, DELHI it was held that mere change in the name of company from Evergreen Autocomp India Pvt. Ltd to Showa India, CENVAT credit cannot be denied to the assessee. Contract/ agreement are not in my name but all the benefits accruing from it are availed by me and all the obligations and formalities are met by me. Can I get CENVAT Credit on invoice which is not in my name but in the name of the service provider/Manufacture which is the .....

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however if X is unable to utilize space or not providing transportation of goods via rail and at the same time Y has the requirement of boggie space or order to transport the goods via rail but does not have agreement or tender to use such space then in such a case Y utilizes X space and provide the service and discharges the liability to Railway department then in such a case CENVAT credit cannot be denied to Y . However as per Rule 9(5) of CENVAT Credit Rules, 2004 the burden to prove credit i .....

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e of service recipient is not an essential requirement for the availment of CENVAT Credit.So CENVAT Credit can be availed by the person who is actually consuming or utilizing the service subject to proving its eligibility. If the invoice is received in the name of Head office/ administrative office, Can the CENVAT Credit be availed by Manufacturing/ factory unit? If the invoice is issued in the name of Head office and if the company has only one factory or manufacturing unit then Head office sh .....

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n case of CCE Vs Chemplast Sanmar 2005 (10) TMI 201 - CESTAT, CHENNAI , it was held that the invoice in the name of Plant II while inputs were received and used in Plant I. It was held that CENVAT credit can be availed by Plant I so long as there is no dispute about receipt of use of material. Does the Ownership of goods is essential requirement to avail CENVAT Credit on them. In some cases it may so happen that capital goods or inputs are used by service provider/contractor in a works contract .....

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arambapu Patil SSK Ltd Vs CCE 2006 (10) TMI 310 - CESTAT, MUMBAI, it was held that components and equipments required for sugar plants were purchased/ manufactured by contractor in the name of manufacturer and brought to the factory of manufacturer and used such components and parts for setting up the sugar plant in the assessee s premises. It was held that assessee should be entitled to CENVAT credit paid on such components and parts which are used in the manufacture of sugar plant installed in .....

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rlier credit was allowed only on the basis of invoice copy marked as Duplicate for transport , now there is no such requirement. Credit is allowed on both original and duplicate copy of invoice marked for buyer or for transport. There are some case laws like BAPL Industries Ltd Vs CCE, Coimbatore 2006 (1) TMI 6 - CESTAT, Chennai or Dhananiwala Textiles (P) Ltd Vs CCE, Hyderabad 2006 (2) TMI 27 - CESTAT, BANGALORE it was held that CENVAT can be taken on the basis of triplicate copy of invoice. Ho .....

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erated Bill of Entry CENVAT credit is also available even if the bill of entry is provisionally assessed and finally assessed. If the bill of entry is in the name of head office or where the bill of entry is generated through Electronic data interchange system where there will be no signature on the bill of entry, then CENVAT can be availed on the same if there is a declaration made by the importer of goods to transfer the goods manufacturer and such declaration should be countersigned by the Cu .....

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a CENVAT Credit on most of expenditure incurred on tours and travelling will remain unclaimed or has not been availed by the organizations on account of doubt whether CENVAT credit can be availed or not, whether expenditure on tour and travels will be eligible of CENVAT credit and so many other reasons. In view of writer, the same can be availed provided if proper records in respect to that expenditure are maintained, then eligibility of credit cannot be denied. It has been observed that about 8 .....

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