Mukesh Sinha (Senior Accounts Assistant) (36 Points)
06 June 2011Sir,
I am getting a problem for entry of Excise Bill.
We have purchased a Capital Good in 07-08 for which we have taken CENVAT Credit. Now in 11-12 we are returning these product to the Vendor in lower price then that period.
What will be the excise duty I have to charge?
Current Price X 10.3%
or
The amount of Excise duty we have taken at that time
Mallikharjun
(Deputy Manager)
(304 Points)
Replied 06 June 2011
You have to charge excise duty based on the following rule 3 of Cenvat Credit Rules, 2004. You have to reduce the excise duty credit taken @ 2.5% per quarter and the balance you have to charge in the invoice.
Basic Value = as agreed by the customer
ED = as per the calculation
VAT/CST = as applicable.
Provided [also] that if the capital goods, on which CENVAT Credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT Credit, namely :-
(a) for computers and computer peripherals :
|
for each quarter in the first year @ 10% |
|
for each quarter in the second year @ 8% |
|
for each quarter in the third year @ 5% |
|
for each quarter in the fourth and fifth year @ 1% |
(b) for capital goods, other than computers and computer peripherals @ 2.5% for each quarter.]
Mukesh Sinha
(Senior Accounts Assistant)
(36 Points)
Replied 06 June 2011
Thank U Sir,
We have Purchased the Machinery in March,08 & till now we have not used it. We have taken credit tt that time Excise Duty Basic @ 16% = 1146552/- + EDu+cess.
Can U clarify me Pls. what I will charge him today as Excise duty
Mallikharjun
(Deputy Manager)
(304 Points)
Replied 06 June 2011
Dear Mukesh,
If you have not used the capital asset for manufacture, then you have to reverse the entire cenvat credit.
If you have used the capital asset for sometime, then you have to reduce the cenvat credit @ 2.5% per quarter and have to reverse the balance credit.
Now it is clear that you have not used the asset. Then raise the invoice as follows:
Basic = as agreed by customer
ED = 1146552/- + EDu+cess.
CST/VAT as applicable.
Hope this clarifies you.
CAclubindia
