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Excess cenvat credit is available in our account

Ram kr. (Buisness) (883 Points)

21 March 2009

Dear Sir,

We have excess cenvat credit. Can we ignore some credit so that we reduce our credit and after that when required we take credit. Please tell rule & regulation in this regards.

thanks

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18 Replies

Ram Avtar Singh (Nagari Sultanpur U.P.Delhi) (14497 Points)
Replied 22 March 2009

its your current assets, cenvat abail regular basis.

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Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 22 March 2009

You can decide to not to take credit and book that expenses in P&L account. Even the current credit you can write off.

However, by booking expenses you will get benefit of only lesser corporate tax by 34% of the amount writte of, in cenvat you get 100% benefit.

sanjeev (govt. Emloyee) (565 Points)
Replied 22 March 2009

Cenvat credit can be taken any time on transporter copy /Original invoice. In my opinion take credit immediately on receipt of Input required for manufacturing of final Excisable product and utilise the CENVAt credit by adjusting the Excise duty on output through RG 23A pArt-11.

hariharan (Head - Finance) (26 Points)
Replied 23 March 2009

Dear sir

My company has huge unutilised cenvat credit since last 3 years. Earlier we were exporting the goods under DEPB scheme hence we were able to sent the shipment under central excise invoice and opt for refund of the same. Since the DBK rate is better thatn DEPB rate we are exporting the goods under DBK scheme. How do we get back our unutilised Our Output product is exempted since we are exporting. How do we getback the unutilised cenvat credit. Under which section/rule. what are all procedures to be followed.

Thanks & regards

hariharan

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 23 March 2009

Dont export under bond- export after payment of duty under claim of rebate.

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hariharan (Head - Finance) (26 Points)
Replied 25 March 2009

Dear Rajesh

That is the simple procedure where we will loose the difference between DBK and DEPB. Further it will affect our cashflow since DBK is faster and DEPB requires lot of time & procedures to be followed.

Is it any way we can claim the unutilised cenvat credit under cenvat rule like by way of surrendering our excise license we can ask for the refund of unutilised cenvat credit.

regards

hariharan

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 25 March 2009

On surrender of registration you will not get the refund. As you are taking cenvat credit, you must be claiming drawback on custom portion only- the difference with DEPB may not be much.

You need to get the issue examined professionally. You should check why the credit is accumulating. Depending upon your nature of business, and group companies business- a professional may try to find some way, within the boundary of law, so that you can utilise your accumulated credit.

Ram kr. (Buisness) (883 Points)
Replied 27 March 2009

Dear Sir,

I have heard my friend that some rule in excise in which we can convert our accumulated cenvat credit into cash without removal export. Is it any rule.

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 28 March 2009

Ram kr. (Buisness) (883 Points)
Replied 03 April 2009

Dear Sir,

we have take cenvat credit on excisable Input, Service tax credit and Capital Goods. We have purchase Machinery under EPCG & DEPB scheme. My question is which of them is more beneficial for take cenvat credit if we have excess credit. My senior told me that credit taken on Capital Goods is more beneficial for company. I cant understand how. Please tell what is the reason.

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hariharan (Head - Finance) (26 Points)
Replied 04 April 2009

Hi Ramkishan

EPCG & DEPB are two seperate issue. You may be procured the machinery under EPCG scheme by paying 3% customsduty in case of imported machinery. In the case of local machinery you can go under EPCG scheme and ask for 100% refund of Exciseduty from JDGFT. You have to declare the same in the shipping bill at the time of exports to fulfill the EPCG obligation.

In the case of DEPB, if you have unutilised cenvat credit which can be utilised by way of exporting the goods under payment exciseduty under DEPB scheme and opt for refund of exciseduty from central excise.

Sachin Adsul (HOD Excise dept) (178 Points)
Replied 04 April 2009

Originally posted by :hariharan
"	Hi Ramkishan EPCG & DEPB are two seperate issue. You may be procured the machinery under EPCG scheme by paying 3% customsduty in case of imported machinery. In the case of local machinery you can go under EPCG scheme and ask for 100% refund of Exciseduty from JDGFT. You have to declare the same in the shipping bill at the time of exports to fulfill the EPCG obligation. In the case of DEPB, if you have unutilised cenvat credit which can be utilised by way of exporting the goods under payment exciseduty under DEPB scheme and opt for refund of exciseduty from central excise.	"