A company is providing taxable service ,Non taxable service & also sale of products.please tell me how much percentage of cenvat credit will company adjust against service tax payable ,The co. is not maintaining seprate books of accounts.
23 Replies
Ravi Jagetiya(CA Final)
(Articled assistant)
(191 Points)
Replied 18 March 2008
hi vivek there are two option if service provider does not want to maintain books of accounts seperately for taxable & exempted goods.
A. HE can take cenvat credit up to 20% of service tax liability ( mamimum credit). However in case of manufacturer not maintaining seperate records, he can not take cenvat credit over & above to 10 % of transaction value charged by manufacturer for excisable goods.
B.He may apply to superintent of Cent. excise, and may opt to to take cenvat credit of all input whether used for taxable or exempted services. Provided that assessee has to take care about following issues
- First of all initially he has to assess his liability towards cenvat credit taken on input used in other than taxable services. It will be decided on provisional basis.
-Now on the basis of actual consumption in such a way he need to pay the same before the 5 of next month.
- At the year end, if there is any short fall towards liability payment he will have to payoff the same by the 30- june of the year.
Dilip Darji
(392 Points)
Replied 18 March 2008
As per Rule 6(3)(c) of CENVAT Credit Rules, 2004, If the manufacturer or provider of output service, opting not to maintain seperate accounts shall utilise only to the extent of an amount not exceeding 20 % of the amount of service tax payable on taxable output service.
Thus, if you opt not to maintain seperate Accout for the input and Input Services used in exempted/taxable Services, there is no bar on availment of CENVAT Credit by you, but the utilisation is restricted only to the extent of 20 % of total Service Tax payable on taxable output service.
Shrawan Bhatia
(11 Points)
Replied 09 May 2008
Can I add a query to the above?
A company is rendering exempted as well as taxable services. Upto 31st March 2008, it had opted for availing service tax credit upto the limit of 20% only,because separate records were not maintained.
WEF 1st April 2008, it has decided to maintain separate records for taxable and exempted services. Can it avail cenvat credit @ 100% on input services for April 2008 as also out of balance lying to the credit of Unutilized credit upto 31st March 2008? I do not find any provision restricting the company to do so?
Lalit Kumar Gupta
(Service)
(609 Points)
Replied 23 May 2008
I have a problem in Service Tax and want clarification from your side.
We are opting Composition scheme of work contracts and want CENVAT credit on Input services and capital goods.
Can we avail CEVAT credit on Input services and Capital Goods?
The wording of Notification No. 32/2007 date May 22, 2007
The provider of taxable service shall not take CENVAT credit of duties or cess paid on any inputs, used in or in relation to the said works contract, under the provisions of CENVAT Credit Rules, 2004.
From the words used any Inputs two views are coming from my mined.
- Any Inputs means:
- Input
- Input Servies
- Capital Goods.
- Any inputs means
- Only Input.
As per 2nd view is concern we can take credit of INPUT SERVICES and CAPITAL GOODS on that.
Please clear me that which of my view is RIGHT.
Lalit Kumar Gupta
(Service)
(609 Points)
Replied 23 May 2008
In this case if we have balance of cenvat credit we can utilized the tax equal to 20% of service tax payable on output services.
Thanks
9953307025
Lalit Kumar Gupta
(Service)
(609 Points)
Replied 23 May 2008
| TDS related problem | |||
| S. No | Particulars | ||
| 1 | Order Value (OV) | 1,000,000.00 | |
| 2 | Advance amount 10% of OV | 100,000.00 | |
| Less:- TDS @ 2.266% | 2,266.00 | ||
| Payment made | 97,734.00 | ||
| 3 | Running bill will be come in | 200000 X 5 = | 1,000,000.00 |
| 4 | 20% Security will be payable after expiry of DLP. | ||
| 1st Running bill comes | 200,000.00 | ||
| Less:- Adjustment of advance @ 10% | 20,000.00 | ||
| Less:- Security @ 20% | 40,000.00 | 60,000.00 | |
| Amount payable | 140,000.00 | ||
| Less:- TDS @ 2.266% | |||
| Net amount payable | 140,000.00 | ||
| I want to know how much TDS will deduct in above red | |||
| and what will be total liability till 1st running bill? | |||
| As per my view is concern TDS amount will be | 3,172.00 | ||
| Total TDS Liability | 5,438.00 | ||
| Basis of my view | |||
| As per provision of income tax act | |||
| We are liable for deduct TDS whichever become earlier. | |||
| 1. At the time of Booking of bills | 200,000.00 | ||
| 2. At the time of making payment. | 240,000.00 | ||
| 240000 is higher so that its liable for tax | 5,438.00 | ||
(Guest)
Whether company registered under company act and register under the same name as SEZ/EOU under STPI will be treated as seperate entity or same entity further, whethre it is necessary to maintain seperate books of accounts and if not maintained what is the impact as with respect to service tax credit.
(Guest)
We are 100% eou manufacturing & exporting goods only.Wehave huge balance of Cenvat credit on inputs,capital goods as well as service tax lying unutilised as our localsale are very rare.Weare not maintaining any separate account for taxable & non taxables.We Have topay service tax on our raw materials as GTA can we utilise the cenvat credit lying in our a/c if so under what sections/provision of the act I can find pl.reply.
I am talking of adjustment of Cenvat credit from liability of paymant of service tax as GTA
Priyaranjan Maurya
(Audit Manager)
(12 Points)
Replied 20 August 2008
| Originally posted by :Guest | ||
| " | In this case if we have balance of cenvat credit we can utilized the tax equal to 20% of service tax payable on output services. Thanks 9953307025 |
" |
Sir,
Whether Rule 6(3)(c) under the Cenvat Credit Rules is omitted w.e.f. from 16.5.2008 or we can avail the balance of input service tax credit as on 16.05.2008 upto 20% of output credit.
Kindly clarify the treatment of opening balance under above category alongwith legal backing.
mohan
(manage)
(20 Points)
Replied 06 September 2008
Dear Sir,
We are registed manufacturing unit, we are having cenvat amount nearely 50lakhs, how to get this amount refund. any provision is there ?
kindly confirm the above.
mohan
09396226415
OFFICESELVA
(Service)
(515 Points)
Replied 07 September 2008
Are you in export business? Exporting manufactured goods or exporting services.
(Guest)
Dear
Working in a freight forwarding company, We are doing Ocean Freight margin around USD 10-15 margin profit. For Ocean freight there is no service tax applicable. Balance what ever collected from the shipper, the same amoount pay to Steamer Liner.
Incase Cenvet credit whatever taken input , the same is my payable service tax. . Payable amount is zero Please clear me that which of my view is RIGHT or i can utlize the cenvet credit any percent of the total payament amount.
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