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Cenvat credit

18 September 2013

There is a company which has not taken any credit of CENVAT In FY 2008-09, 2009-10 & 2010-11 but has started taking credit from 2011-12 and onwards. Can they Take credit of those years in current years?

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9 Replies

Akash Jain (CA Final Student) (261 Points)
Replied 18 September 2013

CENVAT credit not taken earlier and not claimed as expense can be carried forward and be eligible for setting for liability of ST,excise and Customs for current year if the manufacturer,SP,Importer,Exporter is a Registered .

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Vachaspati Dubey (Job) (47 Points)
Replied 18 September 2013

Dear Sir If that has been booked as expense in last year but they ready to credit those expense account in curent year can they take credit for the same in cureent year? Or any other way to do it? Pleaese suggest

Prashant Kini (Article Assistant) (154 Points)
Replied 18 September 2013

Yes eligible cenvat credit can be availed of earlier years by crediting to expenses or assets earlier debited.

Vachaspati Dubey (Job) (47 Points)
Replied 18 September 2013

Thank you Akash Ji

Ramarao Gullipalli (Dy.Manager-Finance & Accounts) (99 Points)
Replied 19 September 2013

Dear Mr.Prasanth Kini,

could you Please provide cenvat credit rule no or any other special notification for earliear years cenvat credit which is not taken before.

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Akash Jain (CA Final Student) (261 Points)
Replied 19 September 2013

Plz refer Rule 4 of CCR,2004 to get more clarifications on the same.

Regards.

Vachaspati Dubey (Job) (47 Points)
Replied 19 September 2013

please confirm once in this below case. Company has booked expense with full value of invoice including service tax in FY 2009-20 and has not claimed any CENVAT in books as well ST-3. Now in FY 2013 14 they was to claim into ST-3 and utilize the same service tax which was paid in FY 2009-10. is this practice acceptable?

Prashant Kini (Article Assistant) (154 Points)
Replied 19 September 2013

Dear Mr.Ramarao Gullipalli. As per Rule 4 (1) of Cenvat Rule - conditions for allowing CENVAT credit: The Cenvat Credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service. Based on above condition, Cenvat credit can be claimed immediately on receipt of the inputs in the factory or premises of the manufacturer or service receiver. It would be noted that conditions states starting point to claim Cenvat credit and it does not state time frame up to which such Cenvat credit needs to be claimed. Further, concept of financial year or calendar year or previous year or assessment year does not exist under service tax law. Hence, if services are received in one year but service tax has been paid in other year then also manufacturer or service receiver can take credit of Cenvat in any current or proceeding years. There is no such restriction on period for claiming of Cenvat credit by manufacturer or service provider. The same has been pronounced in following judgments: CCE, Ahmedabad Vs. Lubi Electronics - 2009 (245) E.L.T. 551 (Tri-Ahmd) J.V. Strips Ltd. v. Commissioner - 2007 (218) E.L.T. 252 (Tribunal) In the above said judgments, it was held that there is no provision for denying credit of cenvat because of delay in claiming of Cenvat by receiver of service nor there is any time limit for taking credit in the Cenvat Credit Rules and therefore, there is no specific time limit to avail Cenvat credit by service receiver. Further, even the supplementary instructions issued by the Central Board of Excise and Customs also do not prescribe any time limit for the purpose to credit allowed. Hence, receiver of service can avail input tax credit on services received by him without any time limit under Rule 4(1) of Cenvat credit rule.