New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

Accumulated Education Cess Balance All Hopes in Vain

Cenvat Credit - By: - Pradeep Jain - Dated:- 17-12-2015 - Introduction Since the announcement of the exemption being granted to the levy of Education Cess and SHE Cess by the Finance Minister in Budget 2015-16, the issue as regards the utilisation of the accumulated balance of Education Cess and SHE Cess has been a sensational issue and a topic for discussion among the assessees and the consultants. This is also evidenced by a number of articles, write ups, representations being made on this iss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Recently, CBEC has released the minutes of the meeting for circulation among the departmental officers wherein it has been stated that the utilisation of accumulated balance of education cess is not available for utilisation and shall stand lapse. This article is an attempt to analyse the justification given for denial of utilisation of cenvat credit balance of education cess and SHE Cess. Extracts from the Minutes As per provisions contained in sub-rule 7(b) of Rule 3 of Cenvat Credit Rules, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

redit Rules, 2004 may be made to allow the utilization of balance CENVAT Credit of Education Cess and Secondary & Higher Education Cess towards payment of either duty of excise or Service Tax. The conference after discussion and briefing from the officers from the Board noted that it was Government s conscious policy decision to withdraw the Education Cess and Secondary & Higher Education Cess. It is a policy decision to not allow utilization of accumulated credit of Education Cess and S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

excise and service tax, and since the credit of Education Cess and SHE cess could be utilised only for payment of Education Cess and SHE Cess respectively; there was no intention to permit utilisation of the accumulated balance of education cess and SHE Cess. The justification given was that since there was no new liability for such cess, the accumulated balance shall lapse. However, the fact that the recent amendments made in the Cenvat Credit Rules, 2004 vide Notification no. 12/2015-C.E. (N. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion given in the meeting for restricting the utilisation of the accumulated balance of education cess and SHE Cess appears to be a mere lame excuse. Look at the judicial pronouncements on the issue In this context, we may also refer to the judgment given by the Hon ble High Court in the case of Shankeshwar Fabrics Private Ltd Vs Union of India [2001 (8) TMI 139 - RAJASTHAN HIGH COURT] wherein it was concluded that the right to Modvat Credit accrues to assessee on the date he pays tax on raw mate .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not specifically state that the credit balance of education cess would be lapsed but putting restriction as regards utilisation tantamounts to treating the accumulated education cess credit as lapsed because the said credit can be utilised only for payment of education cess itself and not for other duties like excise duty, service tax etc. Accordingly, the conclusion of the meeting renders the analogy of the above cited decision as futile and meaningless. Furthermore, in the opinion of the autho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fter a particular date, the said cess are permitted for utilisation against payment of excise duty and service tax. Such a discriminatory approach is not understandable. Before parting Inspite of repeated representations made by the assessees, there is no clear cut amendment or circular issued with respect to utilisation of the accumulated balance of cenvat credit of education cess and SHE cess. Furthermore, the above minutes released by CBEC merely represent the view of the departmental officer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version