Slide 1

Report
INTENSIVE STUDY COURSE ON
SERVICE TAX
ORGANISED
by
WIRC OF ICAI
A candle loses nothing by lighting another candle.
8th August,2012
CA RAJIV LUTHIA
1
 CENVAT CREDIT
RULES, 2004
Presented By
RAJIV LUTHIA
DISCUSSION IS EXCHANGE OF INTELLIGENCE
ARGUMENT IS EXCHANGE OF IGNORANCE
8th August,2012
CA RAJIV LUTHIA
2
CENVAT CREDIT RULES,2004
 Introduced w.e.f. 10th September,2004
 Credit of service tax not available/utilizable in Jammu &
Kashmir.
8th August,2012
CA RAJIV LUTHIA
3
MODVAT/ ST CREDIT RULES
Prior to
10.9.2004
Manufacturer
of Goods
Service
provider
Credit available of
service tax paid on
input services
Credit available of
duty paid on
inputs/capital goods
8th August,2012
CA RAJIV LUTHIA
4
CENVAT CREDIT RULES
Post
10.9.2004
Manufacturer
of Goods
Service
provider
Credit available – duty/service tax
paid on inputs/capital goods/input
services
8th August,2012
CA RAJIV LUTHIA
5
Capital Goods Means
Goods which are specified in certain
chapters of 1st Schedule of CE Act,1944 ;
Pollution control equipment.
Components, spares and accessories of
the goods specified above.
Moulds and dies, jigs and fixtures.
Refractories and refractory materials.
Tubes and pipes and fittings thereof; and
Storage tank
Motor vehicle other than those falling
under tarrif 8702, 8703, 8704,8711 & their
chassis but including dumpers & tippers.
Used
• In the factory of mfgr of
final products But does
not include equipment/
appliances
used
in
office
• for
generation
of
electricity for captive
use within the factory
OR
• For providing output
service
Chapter 82
Tools, hand tools, knives etc
Chapter 84
Machinery and mechanical appliance
Chapter 85
Electrical Machinery, Equipment and parts etc.
Chapter 90
Measuring, checking, precision or testing instruments
Hdg 68.05 & 68.04
grinding wheels & parts thereof
8th August,2012
CA RAJIV LUTHIA
6
MOTOR VEHICLES COVERED
Dumpers, Tippers, Motor Vehicle other
than those falling under tariff heading 8702,
8073, 8704, 8711 & their chassis e.g. cranes,
forklifts, utility vehicle, ambulance etc.
Tariff
Description
Heading
Motor vehicles for the transport of 10 or more
8702
driver
Motor cars & other motor vehicles principally
8703
transport of persons (other than 8702) including
racing cars
Motor vehicles for transport of goods
8704
Motor cycles (including mopeds) & cycles fitted
8711
motor, with or without side-cars.
8th August,2012
CA RAJIV LUTHIA
persons including
designed for the
station wagons &
with an auxiliary
7
CG MEANS….
Motor Vehicle designed for transportation of goods, their
components, spares, accessories, chassis……….registered
in name of service provider & used for
 Providing output service of renting of motor
vehicle; or
 Transportation of inputs & capital goods for
providing an output service or
 Providing courier agency services
Such Motor Vehicle NOT CG FOR A MANUFACTURER
8th August,2012
CA RAJIV LUTHIA
8
CG MEANS….
Motor Vehicle designed for carrying passengers, their
components, spares, accessories, chassis ……….
registered in name of service provider & used for
 Transportation of passengers or
 Renting of such motor vehicle or
 Imparting Motor Driving Skills
Such Motor Vehicle NOT CG FOR A MANUFACTURER
8th August,2012
CA RAJIV LUTHIA
9
WHICH MOTOR VEHICLE?….CG FOR WHOM?…
Vehicle
CG FOR
Manufacturer
CG For SP
Dumpers/Tippers/Motor Vehicles not
falling under 8702,8703,8704,8711 &
chassis


Motor vehicles used for transportation
of goods


(for certain
SP)
Motor vehicles used for transportation
of passengers


(for certain
SP)
8th August,2012
CA RAJIV LUTHIA
10
CONDITIONS FOR ALLOWING CENVAT CREDIT….
Upto 50% of the credit is allowed in the FY in which
CG is received in factory/premises & Balance in the
subsequent year, if the possession of the asset
remains with SP/mfgr................Rule 4(2)
SSI units can avail 100% of CENVAT in the same FY,
subject to condition specified in notification for SSI units.....
Credit allowable even if CG are acquired on lease/hire purchase/loan
agreement from financing company…………….Rule 4(3)
If the CG is removed as such in the same FY, then entire credit is
allowed in the same FY.
Credit of additional duty levied U/r 3(5) of Customs tariff Act shall be
allowed immediately on receipt of CG in the factory of manufacturer.
8th August,2012
CA RAJIV LUTHIA
11
CONDITIONS FOR ALLOWING CENVAT CREDIT….
 No CENVAT on part of value of CG which represents the amount of duty
on which depreciation is claimed.............Rule 4(4)
 Jigs, fixtures, moulds & dies sent by manufacturer to a job worker can
avail credit on them.…………Rule 4(5)(b)
 Inputs, CG partially processed sent to job worker for further process or
manufacture etc. on maintenance of relevant records thereto & Input/CG
received back in factory within 180 days…………Rule 4(5)(a)
 No CENVAT Credit to be availed, if CG is exclusively used for purpose of
mfg of exempted goods (other than exemption provided by way of
notification granting exemption based upon value or quantity)...Rule 6(4)
8th August,2012
CA RAJIV LUTHIA
12
CG REMOVED …….
 Rule 3(5) & (5A)
Removed
By whom Effect
Inputs
or CG
as such
mfgr
SP
CG
After being mfgr or
used
or SP
waste
or
scrap
8th August,2012
or Pay/reverse CENVAT credit
taken except when removed
(i) as free warranty of
product
(ii) For providing output
service
Higher of the following :
a) Pay/reverse
CENVAT
credit
taken
after
reducing the prescribed
%
b) Pay
duty
on
transactional value
CA RAJIV LUTHIA
13
CG REMOVED….
 Rule 3(5B)
Particulars
Inputs
CG
Before put to By whom Effect
use
or written
off Mfg or SP
fully
or
partially
or
provision for
the same is
made in the
books
8th August,2012
CA RAJIV LUTHIA
Pay/reverse
credit taken
CENVAT
If
such
Inputs/CG
used subsequently by
manufacurer/service
provider........then
entitled to take credit
of Cenvat paid earlier
14
Input Means
 Input means
• all goods used in the factory by the manufacturer of the
final product; or
• Any goods including accessories, cleared along with the
final product, the value of which is included in the value
of the final product and goods used for providing free
warranty for final products; or
• all goods used for generation of electricity or steam for
captive use; or
• all goods used for providing any output service;
BUT EXCLUDES...................
8th August,2012
CA RAJIV LUTHIA
15
INPUT EXCLUDES
(A) light diesel oil, high speed diesel oil or motor spirit,
commonly known as petrol;
(B) capital goods except when used as parts or components in
the manufacture of a final product;
(C) motor vehicles;
(D) any goods, such as food items, goods used in a
guesthouse, residential colony, club or a recreation facility
and clinical establishment, when such goods are used
primarily for personal use or consumption of any employee;
and
(E) any goods which have no relationship whatsoever with the
manufacture of a final product.
8th August,2012
CA RAJIV LUTHIA
16
INPUT EXCLUDES
• (F) any goods used for• construction or execution of works contract of a building or
a civil structure or a part thereof; or
• laying of foundation or making of structures for support of
capital goods,
except for the provision of service portion in the
execution of works contract or construction service
8th August,2012
CA RAJIV LUTHIA
17
CENVAT on Inputs/CG
 Inputs should not be used wholly for
exempted goods/service........Rule 6(1)
 CENVAT Credit in respect of inputs/capital goods may
be taken by SP when inputs/capital goods are received in
the factory or premises of manufacturer/SP………….OR
delivered to such service provider, subject to
maintenance of documentary evidence of delivery &
location of the inputs/capital goods..............Rule 4(1),
4(2)(a)
Erstwhile provisions:There was requirement for receipt of inputs & capital
goods in the premises of SP which is now dispensed
with.
Input Service means
 Any service used by provider of taxable service for providing an output
service; or
 Any service used by manufacturer in relation to manufacture of final
products and clearance of final products up to the place of removal.
and includes
 services used in relation to modernization, renovation or repairs of a
factory, premises of provider of output service or an office relating to such
factory or premises,
 advertisement or sales promotion,
 market research,
 storage up to the place of removal,
 procurement of inputs,
 accounting, auditing, financing, recruitment and quality control, coaching
and training, computer networking, credit rating, share registry, and
security, Business Exhibition, Legal Services
 inward transportation of inputs or capital goods &
 outward transportation up to the place of removal.
BUT EXCLUDES..................................................
8th August,2012
CA RAJIV LUTHIA
19
Input Service…Exclusion
 Services in relation to outdoor catering,
beauty treatment, health services, cosmetic & plastic surgery,
membership of a club, health & fitness centre, life insurance, health
insurance and travel benefits extended to employees on vacation such
as Leave or Home Travel Concession, when such services are used
primarily for personal use or consumption of any employee.
 Works Contract Services or Construction Services used for
• Construction or execution of works contract of a building or a civil
structure or a part thereof; or
• Laying of foundation or making of structures for support of capital
goods……..except used for providing Works Contract Services or
Construction Services
8th August,2012
CA RAJIV LUTHIA
20
Input Service…Exclusion
 Services of renting of motor vehicle......
unless motor vehicle is capital goods
Input Service (IS)
IS FOR
Manufacturer
IS For SP
IS of Renting of Dumpers/Tippers/Motor
Vehicles not falling under
8702,8703,8704,8711 & chassis


IS of Renting of Motor vehicles used for
transportation of goods


(for certain
SP)
IS of Renting of Motor vehicles used for
transportation of passengers


(for certain
SP)
8th August,2012
CA RAJIV LUTHIA
21
Inputs Service…Exclusion
 Services of general insurance business, servicing,
repair and maintenance related to motor vehicle which
is not capital goods…..except
o
Used by manufacturer of motor vehicle
o
Insurance Company in respect of vehicle insured
8th August,2012
CA RAJIV LUTHIA
22
CONDITIONS FOR ALLOWING CENVAT ON IS
IS should not be used for wholly exempted
goods/services.......Rule 6(1)
Credit on Invoice raised prior to 31/3/11....
 Allowed on or after the day on which payment
for value of input service & service tax thereon
is made
8th August,2012
CA RAJIV LUTHIA
23
CONDITIONS FOR ALLOWING CENVAT ON IS
Invoice raised after 1/4/2011
General
provision
• Day on which invoice, bill or challan
is received.......Rule 4(7)
ST payable..
reversal charge
mechanism
• Day on which payment made of ST
along with value of service charges
CONDITIONS:in case the payment for value of IS & ST thereon is not made within 3 months
from the date of invoice/bill/challan, the manufacturer/SP to pay an amount equal
to CENVAT Credit availed on such input service.
Later, Manufacturer/SP is entitled to take such CENVAT Credit on payment of
value of IS & ST thereon.
In case of credit note or refund of value of IS & ST thereon, CENVAT credit to be
reversed /paid on or before the due date of relevant Month/Quarter
8th August,2012
CA RAJIV LUTHIA
24
POINT AT WHICH CENVAT CREDIT IS AVAILABLE
Capital
Goods
• Receipt of goods in premises or delivery made
subject to documentary evidence of delivery &
location of inputs
Input
• Receipt of goods in premises or delivery made
subject to documentary evidence of delivery &
location of inputs
Input
Service
8th August,2012
• invoice/bill issued before 1/4/11..... Payment of value
of service & ST thereon
• Invoice/bill issued after 1/4/11....... Date on which
invoice is received, subject to conditions
• If under reverse charge..When payment made
CA RAJIV LUTHIA
25
“Output Service” means …..
Any taxable service provided by service provider located in taxable territory
but doesn’t include
 Service specified in Section 66D of the Act…..i.e. Negative List
 Where the whole of ST payable by recipient of service
“Exempted Service” means…..
(1) Taxable service which is exempt from the whole of the ST,
(2) Service, on which no service tax is leviable
(3) Taxable service whose part of value is exempted on the condition that no credit
of inputs and input services used for providing such taxable service, shall be taken;
But shall not include a service which is exported in terms of rule 6A of the Service
Tax Rules, 1994)
“Exempted Goods” means…..



Excisable goods which are exempt from the whole of the duty of excise
leviable thereon, &
Includes goods which are chargeable to “Nil” rate of duty &
Goods in respect of which benefit
U/n 1/2011-CE is availed or specified
8th August,2012
CA RAJIV LUTHIA
entries in notification no. 12/2012-CE is availed
26
Specified duties/taxes eligible as CENVAT credit
•
•
•
•
•
•
•
•
•
•
•
•
Basic Excise Duty (except duty paid U/n 1/2011-CE)
Special Excise Duty
Additional duty on Textiles and Textiles articles
Additional duty on ‘goods of special importance’
Countervailing duty on imports
National Calamity Contingent duty
Additional duty of leviable U/s.3(5) of Custom tariff
Act,1985– VAT (SP not eligible)
Additional duty of excise on tea
Service tax paid under Sec 66,66A,66B
Ed cess on excisable goods/service tax
S& H Ed Cess on excisable goods/service tax
Additional duty of Excise on pan masala and tobacco
products
8th August,2012
CA RAJIV LUTHIA
27
CENVAT credit can be utilised for following payments
 Any excise duty on final product;
 CENVAT Credit taken on input if such inputs are removed as such;
 CENVAT Credit taken on capital goods if such capital goods are removed
as such;
 Amount under Rule 16(2) of the Central Excise Rules, 2002. (payment of
CENVAT on account of sales return)
 Service Tax on any output service.

While paying duty/tax, the CENVAT Credit shall be utilized only to the
extent of such credit available on the last day of month or quarter as
the case may be for payment of duty/tax relating to the month or qtr.

Provided CENVAT credit shall not be utilized for payment of duty on
goods for which exemption under notification no.1/2011-CE is availed.
(Goods on which 1% duty is levied)

CENVAT cannot be used for payment of ST in respect of services
where the person liable to pay tax is the service recipient
8th August,2012
CA RAJIV LUTHIA
28
Utilization of CENVAT Credit
Can be utilized against liability of
Nature of
CENVAT
Credit
Excise Duty
Excise Duty

Service Tax
EC on
Duty/ST
SHEC on
Duty/ST
Int/Penalty









EC on
Duty/ST





S& H Ed
Cess on
Duty/ST





8th August,2012
Service Tax
CA RAJIV LUTHIA
29
Transfer of Credit…Rule 10
• In case of shift of factory or transfer of business on account of
change in ownership or sale, merger, amalgamation, lease or
transfer, the Transferee is entitled for unutilized credit of
sold/merged/amalgamated/leased factory provided
• Stock of inputs/WIP is also transferred along with factory or
ownership ;&
• input/capital goods on which credit is availed are duly
accounted for to the satisfaction of AC/DC
8th August,2012
CA RAJIV LUTHIA
30
Obligation…Rule 6

Rule 6(1)…….NO CENVAT to be allowed on qty of inputs/inputs services
used in mfg of EG or for providing ES except as provided in Rule 6(2)

Rule 6(2).................... Separate A/c’s to be maintained for receipt,
consumption, inventory etc for Inputs/Input Service........ CENVAT allowed
only for Inputs/input Service used in relation to mfg of dutiable goods or for
providing taxable service
8th August,2012
CA RAJIV LUTHIA
31
Obligation…Rule 6

Rule 6(3).... NOTWITHSTANDING anything contain in Rule 6(1) or 6(2).....
assessee opts not to maintain separate A/c’s shall follow any 1 option:i.
ii.
iii.
Pay 6% on value of exempted goods & services ......
•
In case ED is paid on EG, the same shall be reduced from 6%
•
If any abatement in respect of taxable services is granted with a
condition for non availment of CENVAT Credit. the amount to be
paid shall be 6 % of the value so exempted
•
In case of transport of goods/passenger by rail, the amount to be
paid shall be 2 % of the value so exempted
Make proportionate reversal as per Rule 6(3A) (proportionate
reversal)
Hybrid option: maintain separate A/c’s for Inputs & make
proportionate reversal for Input Services
8th August,2012
CA RAJIV LUTHIA
32
Obligations of provider of taxable & exempted
services
Option available for SP of taxable & exempted Services/goods
Maintain separate A/c’s
for receipt, consumption
& inventory of
input & input service
Pay:
6% on Mfg of EG &
Exempted Service
Not to maintain separate A/c’s
but shall follow
either of following options
Reverse/pay: the CENVAT
attributable to the Ip/IS used
in relation to mfg of EG/
providing of ES as per
condition& procedure Under
sub-rule 6(3A)
Hybrid option :Separate A/c’s for
Inputs &
Reversal for
Input Service
Rule 6(1)……. No CENVAT to be allowed on qty of Inputs/input service exclusively
used in mfg of exempted goods or provision of exempted service.
8th August,2012
CA RAJIV LUTHIA
33
Conditions for option of proportional reversal

The provider of output service shall intimate in writing in the beginning
of F.Y. to the superintendent of CE giving the following particulars
namely : name, address and registration No. of the manufacturer of goods or
provider of output service;
 date from which the option under this clause is exercised or
proposed to be exercised;
 description of dutiable goods or taxable services;
 description of exempted goods or exempted services;
 CENVAT credit of inputs and input services lying in balance as on
the date of exercising the option under this condition;

Option once exercised can not be withdrawn during the remaining part
of financial year.

Rule 6(3A)(b) & (c) provides the mechanism for determining the
amount equivalent to CENVAT Credit attributable to inputs/input
service used in relation to provision of exempted services.
8th August,2012
CA RAJIV LUTHIA
34
RULE 6(3A)… conditions for option of proportional
reversal under rule 6(3)(ii)
Reversal mechanism (for input service)………
 Calculation to made for every month (Provisional):Exempted Services/Goods (for preceding FY)
CENVAT on IS
Exempted Services/Goods + taxable
services/Goods (For preceding FY)
8th August,2012
CA RAJIV LUTHIA
35
RULE 6(3A)… conditions for option of proportional
reversal under rule 6(3)(ii)
Reversal mechanism (for input service)………
 Calculation to made for Current F. Y. (Final calculation):Exempted Services/Goods (for Current FY)
CENVAT on IS
Exempted Services/Goods + taxable
services/Goods (For Current FY)
8th August,2012
CA RAJIV LUTHIA
36
RULE 6(3A)… conditions for option of proportional reversal
 the short paid amount arising due to the reversal mechanism provided
under Rule 6(3A) (b) & (c) to be paid on or before 30th June of the
succeeding financial year.
 the interest rate for payment of short paid amount after 30th June is 24%
per annum.
 the excess amount arising due to the reversal mechanism provided under
Rule 6(3A) (b) & (c) to be adjusted suo motu, by taking credit of such
amount.
 SP shall intimate to the jurisdictional superintendent of Central Excise,
within a period of 15 days from the date of payment as per under (Rule
6(3A)(d) or adjustment of the excess payment in the CENVAT credit
(Rule 6(3A)(f) ….. Information in prescribed format
8th August,2012
CA RAJIV LUTHIA
37
RULE 6(3A)… conditions for option of proportional reversal
 In case of CENVAT attributable to exempted goods/service cannot be
determined due to no dutiable goods manufactured/ taxable service
provided in preceding year…….The Reversal exercise to be done at the
end of financial year and not on monthly basis
 Rule 6(3B) provides that a banking company & a financial institution
including NBFC providing services by way of extending deposits, loans
or advances to pay an amount equal to 50% of CENVAT credit availed
on inputs & input services every month.
 Rule 6(3D) provides that in cases where any abatement in respect of
taxable services is granted with a condition for non availment of
CENVAT Credit, payment of amount under Rule 6(3) shall be deemed to
be CENVAT Credit not taken for the purpose of exemption notification.
8th August,2012
CA RAJIV LUTHIA
38
“Value”
 Shall have the same meaning as assigned to in section 67 of
The Finance Act, 1994
 In case of trading, the value for the purposes of Rule 6(3) & Rule
6(3A) shall be higher of : the difference between the sale price & the cost of goods sold
(determined as per the generally accepted accounting
principles without including expenses incurred towards their
purchases) or
 10% of cost of goods sold
 In case of trading in securities, value shall be higher of
 Difference of Sale Price & Purchase Price of securities ;or
 1 % of the Purchase price
8th August,2012
CA RAJIV LUTHIA
39
“Value”
 Value shall not include value of service by way of extending
deposits, loans or advances if the consideration is represented by
way of interest or discount.
 In case of availing option under Rule 6 (7), (7A), (7B) or (7C) of
the STR, 1994, the value shall be the amount of value which when
calculated @ rate U/s 66B resulted into same service tax amount.
8th August,2012
CA RAJIV LUTHIA
40
Other conditions
 Rule 6(4) provides that the capital goods shall not be exclusively
used for purpose of manufacture of the exempted goods (other
than vide notification where exemption is granted based upon value
or quantity)
 Rule 6(6A) inserted whereby provision of Rule 6(1) to Rule 6(4) are
not applicable in case the taxable services are provided without
payment of service tax to a developer/unit of SEZ for their
authorized operations………retrospectively amended w.e.f. 10th
February, 2006 vide Finance Act, 2012
 Rule 6(6)…..Provision of Rule 6(1) to Rule 6(4) are not applicable
in case of excisable goods removed without payment of duty under
certain circumstances
8th August,2012
CA RAJIV LUTHIA
41
Other conditions
 Rule 6(7)… Provision of Rule 6(1) to Rule 6(4) are not applicable
in case in case the taxable services are provided without payment
of service tax to a developer/unit of SEZ for their authorized
operations or when a service is exported
 Rule 6(8)……Service for the purpose of Rule 6 shall not be treated
as exempted service when:
 Service is export of service in view of Rule 6A of Service Tax
Rules, 1994 and payment for which received in CFE; and
 Even If CFE not received within 6 months or extended period
granted by RBI from date of provision of service
8th August,2012
CA RAJIV LUTHIA
42
Documents for availing CENVAT credit
•
•
•
•
•
•
Invoice by manufacturer/importer/1 stage dealer/2 stage dealer
Invoice/Bill/challan issued by provider of input service
under reverse charge GAR-7 Challan
Invoice/bill/challan issued by Input Service Distributor
Bill of Entry
Supplementary invoice issued by manufacturer/ importer of
Inputs /CG in terms of CE Rules, 2002 in case of additional
excise duty except when such amount became recoverable on
account of short levy/non levy on grounds of fraud, collusion etc
with intent to evade tax
• Supplementary invoice issued by SP except when such amount
became recoverable on account of short levy/non levy on
grounds of fraud, collusion etc with intent to evade tax
• The invoices/Bill/challan should contain all the details prescribed
under CER, 2002 & STR, 1994.
• In absence of all such details, AC/DC as the case may be, may
43
allow the CENVAT credit after being satisfied
Interest
 Rule 14 amended w.e.f 17th March, 2012, whereby the
manufacturer/service provider to pay interest only when the
CENVAT credit has been taken and utilized wrongly or has
been erroneously refunded.
HON’BLE SUPREME COURT IN THE CASE OF UOI VS INDSWIFT LABORATORIES LTD 2011-TIOL-21-SC-CX
 held that the interest is payable from date of taking Credit & not from the date
when the CENVAT credit is utilized.
 Rule 14 of CCR, 2004 provides that where CENVAT credit has been “taken”
OR “utilized wrongly” OR “has been erroneously refunded”, the same along
with interest would be recovered from the manufacturer or the provider of the
output service.
 On the happening of any of the three aforesaid circumstances such credit
becomes recoverable along with interest from the date of availment of
CENVAT Credit.
 Relying on the above decision of Apex court, CBEC has issued similar
clarifications vide circular No.942/03/2011-CX Dated 14th March, 2011
8th August,2012
CA RAJIV LUTHIA
44
Interest
• HON’BLE Karnataka High Court in the case of CST Vs. Bill
Forge Pvt Ltd 2011 (TIOL) 799 held that
• Credit of excise duty in the register maintained for the said
purpose is only book entry.
• Before utilization of such credit, the entry has been
reversed, it amounts to not taking of credit.
• Interest is compensatory in character, and is imposed
on an assessee, who has withheld payment of any tax,
as and when it is due and payable.
• Interest U/s 14 not payable if credit reversed before
utilization of CENVAT credit.
8th August,2012
CA RAJIV LUTHIA
45
Returns
• Manufacturer –
• monthly return within 10 days from the end of the month.
• However, if manufacturer is availing exemption under
notification based on value/quantity of clearance in a
financial year, he shall file quarterly return
• SP• half yearly return in Form ST-3 within one month of the
end of half year
• ISD• half yearly return Form ST-3 within one month of the end
of half year
• Revised return to be filed within 60 days from the date of
submission of original return
8th August,2012
CA RAJIV LUTHIA
46
Penalties
Particulars of contravention
In respect of
Availment or Utilization of Inputs/CG/IS
CENVAT Credit wrongly or in
contravention
of
any
provisions
Wrong availment/ utilization Inputs/CG/IS
of CENVAT Credit due to
fraud,
collusion,
willful
misstatement etc with intent
to evade payment of duty
8th August,2012
CA RAJIV LUTHIA
Penalty
Goods liable for
confiscation
&
Penalty
not
exceeding
the
amount of duty/tax
or
Rs.2,000/whichever is higher.
Over and above the
penalty stated in
item
no.1,
the
penalty U/s.11AC
of
The
Central
Excise Act, 1944
shall be levied i.e.
100% of the duty
sought to be evaded
by
the
manufacturer.
47
Penalties
Particulars of
In respect of
contravention
Wrong
availment/ Inputs/CG/IS
utilization
of
CENVAT
Credit due to fraud,
collusion,
willful
misstatement,
suppression
or
contravention
of
any
provision with intent to
evade payment of tax
General Penalties- For
contravention
of
any
provisions of CCR,2004
for which no penalty is
provided
8th August,2012
CA RAJIV LUTHIA
Penalty
Over and above
the penalty stated
in item no.1, the
penalty U/s.78 of
The Finance Act,
1994 shall be
levied i.e. 100% of
the service tax
sought
to
be
evaded by the
service provider.
Upto Rs 5,000/-
48
Input Service Distributor

Means an office of the manufacturer or producer of
final products or provider of output service which receives
invoice towards IS…….. for the purpose of distributing the credit of ST paid
on the said services to such manufacturer or producer or provider, as the
case may be.
CONDITIONS FOR DISTRIBUTING CREDIT:

The credit distributed against a document does not exceed the amount of
service tax paid thereon

No distribution allowed in respect of ST attributable to services used in unit
exclusively engaged in manufacture of exempted goods or providing
exempted service.
8th August,2012
CA RAJIV LUTHIA
49
Input Service Distributor
CONDITIONS FOR DISTRIBUTING CREDIT:

Credit of service tax attributable to service used wholly in a unit shall be
distributed to that unit only

Credit of service tax attributable to service used in more than one unit shall
be distributed pro-rata on the basis of the turnover during the relevant
period of the concerned unit to the sum total turnover of all the units to
which the service relates during the same period

In case of assessee do not have any total turnover in the said period, the
ISD shall distribute credit only after the end of such period wherein the total
turnover of its unit is available

Relevant period shall be the month previous to the month during which the
CENVAT is distributed.
8th August,2012
CA RAJIV LUTHIA
50
Input Service Distributor

Total turnover to be determined as per Rule 5 (i.e refund to exporters)

Sum of : All excisable goods cleared including exempted goods, dutiable goods
& excisable goods exported
 Export turnover & the value of all other services
 All inputs removed U/r 3(5) against an Invoice

Export turnover of service = pymt rcd during relevant period + export
services whose provision has been completed for which payment had
received in advance earlier – advance received for which the provision of
service has not been completed during the relevant period.
Value of other services = as per Rule 6(3)

8th August,2012
CA RAJIV LUTHIA
51
REFUND OF CENVAT
• The manufacturer who clears final/intermediate product for export without
payment of a duty under bond or undertaking which is cleared for export
or provider of output service which is exported without payment of
Service Tax shall be allowed refund of CENVAT Credit as determined by
the formula.
• Refund amount =
(Export Turnover of goods + Export Turnover of Service) * NET CENVAT
Total turnover
• The procedure & conditions for filing refund claim are prescribed U/n.
27/2012-CX (NT) dated 20th June, 2012
• Refund claim is required to be filed within a period of 1 year.
•
• No refund shall be allowed if claim for drawback under customs & CE
Duty Drawback Rules, 1995 is allowed.
•
8th August,2012
CA RAJIV LUTHIA
52
REFUND OF CENVAT to SP providing services taxed on
reverse charge basis
• A provider of service providing services notified U/s. 68(2) & being
unable to utilize the CENVAT credit availed on Inputs & Input Services
for payment of service tax on such output services,
•
shall be allowed refund of such unutilized CENVAT credit subject to
procedure, safeguard, conditions & limitation as may be specified
8th August,2012
CA RAJIV LUTHIA
53
CA. Rajiv Luthia
R.J.Luthia & Associates
Chartered Accountants
Ph : 2564 1553/2569 4989
Email: [email protected]
8th August,2012
CA RAJIV LUTHIA
54

similar documents