Vat
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 October 2013
what is CENVAT?? AND ITS INPUT CREDIT
04 October 2013
Cenvat is the input credit that you get when you purchase goods/Raw material from registered dealer/Manufacturer.
Message likes :
1 times
04 October 2013
Every service provider is also a service receiver.
For Example all the service providers have at
least a Telephone in their office. They are
paying service tax on the telephone charges .
The service tax on telephone charges becomes
a part of the cost for the service provider .
When he collects service tax from the customer
it becomes tax on tax which increases the
actual rate of tax payment.
This phenomena of tax on tax is called the
cascading effect. The government does not
want this to happen.
Therefore the system of cenvat credit was
introduced by the Government. This allows the
service provider to take the credit of tax paid
for the service received.
Therefore the tax paid does not become part of
the cost of the service provided and cascading
effect is avoided.
This system of taking credit on the tax paid
and using the credit for the tax payable is
called cenvat credit
For Example all the service providers have at
least a Telephone in their office. They are
paying service tax on the telephone charges .
The service tax on telephone charges becomes
a part of the cost for the service provider .
When he collects service tax from the customer
it becomes tax on tax which increases the
actual rate of tax payment.
This phenomena of tax on tax is called the
cascading effect. The government does not
want this to happen.
Therefore the system of cenvat credit was
introduced by the Government. This allows the
service provider to take the credit of tax paid
for the service received.
Therefore the tax paid does not become part of
the cost of the service provided and cascading
effect is avoided.
This system of taking credit on the tax paid
and using the credit for the tax payable is
called cenvat credit
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- GST on export of services and Input Credit
- ITC temporary reversal and reclaim
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- TDS U/S. 194NF
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- Applicable TDS rate for sale of property in Nov 2024
- RCM INVOICING FROM NOV-2024
- Import license renewal
- How to determine cost of acquisition of shares on De-merger or Merger
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
