Admissibility of Cenvat Credit as business Expenses

This query is : Resolved

HARISH KAPOOR (Querist)
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12 August 2009 If a companey had huge amount of accumulated unutilised Cenvat Credit of Service Tax and in the year 2009-10 company decided not to show this amount under cenvat CreditRecoverable account as cuttent asset and want to charge whole amount to P & L account as Service Tax as expenditure. will this amount be allowable in the computation of Taxable Income (under Income Tax) as a deductible expenditure of this year or the amount pertaining to earliear years booked under Cenvat credit recovrable a/c will be disallowed as Inadmissible expenses being Prior Period.

chetan soni

chetan soni (Expert)
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12 August 2009 you will not be able to take the entire available cenvat balance as expenses.

Unless the entire balance written off by excise authority or you stopped manufacturing the excisable goods.

HARISH KAPOOR

HARISH KAPOOR (Querist)
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13 August 2009 In this query the assessee is a service provider and not a manufecturer.Since the assessee do not want the utilise the accumulated cenvat credit of earlier years and want to charge the same to Revenue as Service Tax (Exps).

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