Become a Certified GST Practitioner. Batch begins 18th Nov. Register Now!

Mat credit utilisation with cess or not?

CS Arjun Rajagopal (B.com, ACS) (1056 Points)

12 July 2016

Dear CCI Members,

Our normal tax liability for A.Y 2016-17 is Rs. 95,097

Cess liability is Rs. 2853

Total tax liability is Rs. 97,950

Book profit is NIL so not MAT liaiblity.

We have got MAT credit of Rs. 8,94,274.

Now my question is can we utilise MAT Credit of Rs. 97,950 (ie including cess of Rs.2853) or Rs.95,097 (ie without cess)?

Please relevant section/case law/notification for my reference.

Thanks & Regards,

Arjun Rajagopal

Reply
Follow
Share

5 Replies

Shubham Gupta (Business Consultants) (2077 Points)
Replied 12 July 2016

MAT credit to be used only for income tax without cess.

https://groups.google.com/forum/#!topic/forum4ca/4Sv3FAQF1bg

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

CS Arjun Rajagopal (B.com, ACS) (1056 Points)
Replied 12 July 2016

Thank you sir for your reply. By reading the points given in the link mentioned above I understood MAT credit doesn't include cess. However on MAT are we not liable to pay cess and surcharge(if applicable)? Please clarify.

Shubham Gupta (Business Consultants) (2077 Points)
Replied 12 July 2016

MAT credit to be used only for income tax without cess.

https://groups.google.com/forum/#!topic/forum4ca/4Sv3FAQF1bg

Shubham Gupta (Business Consultants) (2077 Points)
Replied 12 July 2016

it emerges that MAT payable u/s 115JB is only income tax and does not include surcharge or education cess.

Therefore, if only income tax is paid under the provisions of section 115JB it is natural that tax credit u/s 115JAA will only be of income tax and not of surcharge and education cess.

the Tribunal ruled in favour of Revenue that the for the purpose of carry forward and set off in subsequent years, MAT shall not include surcharge and cess.