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Central Excise CENVAT Credit

Central Excise CENVAT Credit. Rajesh Choudhary. CENVAT Credit. What to avail When to avail How to avail How much to avail How to utilize. Rule 2 & 3 Rule 4 Rule 9 Rule 6 & 7 Rule 3. CENVAT Credit. Inputs. Capital Goods. Input Services. CENVAT Credit Motor Vehicles.

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Central Excise CENVAT Credit

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  1. Central ExciseCENVAT Credit Rajesh Choudhary

  2. CENVAT Credit What to avail When to avail How to avail How much to avail How to utilize Rule 2 & 3 Rule 4 Rule 9 Rule 6 & 7 Rule 3 Rajesh Choudhary

  3. CENVAT Credit Inputs Capital Goods Input Services Rajesh Choudhary

  4. CENVAT Credit Motor Vehicles Applicable from April 01, 2012 Specified Motor Vehicles Trucks & Lorries Bus Motorcycles Cars & Cabs their Bodies Rajesh Choudhary

  5. CENVAT Credit Motor Vehicles Specified Service Providers Courier Service, Tour Operator Service, Rent-a-Cab Service, Cargo Handling Service, Transport of Goods by Road, Outdoor Caterer Service, Pandal or Samiana Service Rajesh Choudhary

  6. CENVAT Credit Motor Vehicles As Capital Goods Specified Motor Vehicles + Other Motor Vehicles to Specified Service Providers Other Motor Vehicles to AllService Providers Rajesh Choudhary

  7. CENVAT Credit Motor Vehicles Input Service of Rent a Cab/Hiring Specified Motor Vehicles + Other Motor Vehicles to Specified Service Providers Other Motor Vehicles to AllService Providers Rajesh Choudhary

  8. CENVAT Credit Motor Vehicles Input Service of Repair/Insurance Specified Motor Vehicles + Other Motor Vehicles to Specified Service Providers + Manufacturer/Insurer Other Motor Vehicles to AllService Providers + Manufacturer/Insurer Rajesh Choudhary

  9. CENVAT Credit Rules Capital goods removed after use or removed as scrape/waste Applicable from 17.03.2012 CENVAT Credit to be reversed Higher of (A) Total CENVAT Credit on Capital Good Less 2.5% CENVAT Credit for each Quarter or part from date of taking Credit (B) Duty on transaction value Rajesh Choudhary

  10. CENVAT Credit Document Capital goods and Inputs Allowed when received in premises Delivered to Service Provider/Manufacture with Documentary Evidence Rajesh Choudhary

  11. Refund of CENVAT Credit Rule 5 redrafted Refund amount = Export turnover of services X Net CENVAT Credit Total turnover Rajesh Choudhary

  12. Refund of CENVAT Credit Value of ExportService For 2010-11 2009-10 2011-12 Payments received for 2010-11 + Exports completed - Advance for Exports Advance for Exports Exports to be completed Rajesh Choudhary

  13. Refund of CENVAT Credit Total turnover Export turnover of Service + Inputs removed as such not capital goods Rajesh Choudhary

  14. CENVAT Credit Rules Standard ratio of reversal in Rule 6(3)(i) enhanced from 5% to 6% (April 01, 2012) Calculation of reversal ratio Rule 6(3)(ii) Exempted Service Turnover Total Service Turnover CENVAT Credit Rajesh Choudhary

  15. Value of Service Service taxed @ normal rate & Service taxed under abatement Value as per Section 67 Service taxed @ special rate Tax @ special rate Grossed up by Normal Rate • Trading • 10% of COS • or • Sale price less COS Rajesh Choudhary

  16. SampleProfit & Loss A/c Commission to Sub agents 70 L Cost of local tour packages purchased 15 L Cost of outbound tours purchased 25 L Cost of goods purchased 48 L Overheads 50 L Commission on sale of air tickets 100 L (taxed paid on basic fare) Tour operations 20 L (packaged tours) Outbound tours 30 L (payment in Forex) Trading of goods 50 L Rajesh Choudhary

  17. Value of Commission Income Taxable Service Commission Income 100 L Basic Fare 50 L Service Tax @ 0.6% 50L X 0.6% 30000 Value 30000 X 100/103 L Rajesh Choudhary

  18. Value of Tour Operations Exempted Service Tour Operations Income 20 L Service Tax @ 10% on 75% value 20L X 75% X 10% 1.5 L Value 20 L Value of Outbound tours Taxable Service Export of Services 30 L Rajesh Choudhary

  19. Value of Trading Income Exempted Service Trading Income 50 L Purchases 48 L Cost of Sales 45 L Opening Stock 0 + Purchases 48 L - Closing Stock 3 L Rajesh Choudhary

  20. Value of Trading Income • Exempted Service • Higher of (a) and (b) • Sales less COS • 50 L – 45 L 5 L • (b) 10% of COS • 45 L X 10% 4.5 L • Value 5 L Rajesh Choudhary

  21. CENVAT Credit eligible Commission to Sub agents 70 L (35 L X 0.6%)21000 Cost of local tour packages 15 L (15 L X 75% X 10%) 112500 Cost of outbound tours 25 L Nil Cost of goods purchased 48 L Nil Overhead (50 L X 10%) 50 L 500000 Total Credit521000 Rajesh Choudhary

  22. How much to avail Exempted Services 25 L Trading & Tour operations Taxable Services 33 L Commission & Outbound Tours CENVAT Credit allowed 521000 – {25 L/(33 L + 25L) X 521000} = 296431 Rajesh Choudhary

  23. Input Service Distributor Common Credit Pro rata basis Credit related to exempted unit No distribution Credit exclusively related to one unit No distribution to other units Rajesh Choudhary

  24. CENVAT Credit Rules Applicable from 17 March 2012 Rule 14 2012 No tax liability till Earlier Credit to be reversed with Interest Purchased in 2009 Credit availed by CA 10 L Now Credit to be reversed without Interest Rajesh Choudhary

  25. Reverse Charge Applicable from date to be Notified After enactment of Finance Bill, 2012 Rajesh Choudhary

  26. Reverse Charge Earlier Now • Telecommunication • General Insurance Auxiliary • Insurance Auxiliary Service • by agent • Import of Service • Goods Transport Agency Service • Mutual Fund Distributors • Sponsorship Service a a a a a a a r r a a a r a Rajesh Choudhary

  27. Reverse Charge Service to Business Entity by Individual Advocates TaxNil100% Rajesh Choudhary

  28. Reverse Charge Service by Arbitral Tribunal to Business Entity TaxNil 100% Rajesh Choudhary

  29. Reverse Charge Support Service to Business Entity by Government/ local authority TaxNil 100% Rajesh Choudhary

  30. Reverse Charge Rent a Cab Service by Individual/ proprietary firm/HUF by Partnership firm/LLP to Body Corporate Tax (abetment) Nil 100% Tax 60% 40% Rajesh Choudhary

  31. Reverse Charge Manpower Service by Individual/ proprietary firm/HUF by Partnership firm/LLP to Body Corporate Tax 25% 75% Rajesh Choudhary

  32. Reverse Charge Works Contract Service by Individual/ proprietary firm/HUF by Partnership firm/LLP to Body Corporate Tax 50% 50% Rajesh Choudhary

  33. CENVAT Credit Document Credit allowed on Invoices + Challans used for payment of Tax under Reverse Charge Rajesh Choudhary

  34. New Abatement & Valuation Scheme Applicable from date to be Notified enactment of Finance Bill, 2012 Rajesh Choudhary

  35. New Abatement & Valuation Scheme Works Contract Service Exemption Original work60% Completion work40% Land included 75% Composition Scheme @ 4.8% + Cess on full value Value = Gross Amount less Sale of/ Transfer in property No Credit of Inputs Rajesh Choudhary

  36. New Abatement & Valuation Scheme Existing Abatement 90 70 NA Proposed Abatement 90 70 70 Financial Leasing Service 04/2006 Transport of Goods by Rail Transport of Passengers by Rail CENVAT Credit of Inputs, Capital Goods and Input Services Allowed Rajesh Choudhary

  37. New Abatement & Valuation Scheme Existing Abatement 40 30 70 50 Proposed Abatement 30 30 60 40 • Convention center/Mandap + Catering • Pandal + Catering • Restaurant • Outdoor Catering Credit of Capital Goods and Input Services Allowed Inputs (food items) not allowed Rajesh Choudhary

  38. New Abatement & Valuation Scheme Existing Abatement 50 NA Slabs deleted Proposed Abatement 40 60 01.04.2012 • Hotels • Airlines Credit of Input Services Allowed Inputs & Capital Goodsnot allowed Rajesh Choudhary

  39. New Abatement & Valuation Scheme Existing Abatement 75 60 30 25 Proposed Abatement 75 60 30 50 • GTA • Rent a Cab • Chit Fund • Goods by Vessel Credit of Capital Goods, Input Servicesand Inputsnot allowed Rajesh Choudhary

  40. New Abatement & Valuation Scheme Existing Abatement 75 90 60 Proposed Abatement 75 90 60 • Tour & Travel • Package Tour • Hotel Accommodation • Unpackaged Tour Credit of Capital Goods, Input Servicesand Inputsnot allowed Rajesh Choudhary

  41. Rajesh Choudhary CHOUDHARY & ASSOCIATES CHARTERED ACCOUNTANTS carcchoudhary@gmail.com 9987699427

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