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tax audit report

Shrikant Balchandra Vaishnav (Articleship) (52 Points)

14 September 2009

please explain the reporting for clause 22(a) & (b) in form no.3CD in tax audit report.

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amiya ( ) (114 Points)
Replied 14 September 2009

This clause requires the factual reporting about the amount of MODVAT credit availed of and utilised during the year as well as its treatment in P & L account and treatment of outstanding MODVAT credits in the accounts. CENVAT credit Rules were first introduced in place of MODAVT credit and 2004 have now become applicable.

Accoudingly, tax auditor should check relevant statutory records (Both parts) maitained under the Central Excise rules, 1944 and the records maintained under CENVAT credit Rules 2004. The tax auditor should verify that there is a proper reconciliation between balance of CENVAT credit in the accounts and relevant excise records and he has to report the amount of CENVAT availed and utilixed under the sub clause. In a given case CENVAT availed may be lessar than the CENVAT credit utilised during the year on account of opening balance in CENVAT account.

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Shrikant Balchandra Vaishnav (Articleship) (52 Points)
Replied 14 September 2009

Thanks.

But can we report about the MVAT( Maharashtra value added tax) credit availed and utilised during the year under abovementioned clause?

Can Mvat credit be assumed as cenvat credit? OR credit of Excise duty, custom duty, service tax alone be treated as cenvat credit?

My client is Wholesale yarn dealer. He collects Mvat on sales, avails credit on purchases of yarn and balance will be paid or taken as receivable. Shall we report such situation under clause 22(a). If yes HOW?