Central Excise CENVAT Credit Rajesh Choudhary

CENVAT Credit Rajesh Choudhary 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 8/16/20152

CENVAT Credit Rajesh Choudhary InputsCapital GoodsInput Services 8/16/20153

CENVAT Credit Motor Vehicles Applicable from April 01, 2012 Trucks & Lorries Cars & CabsMotorcyclesBus Specified Motor Vehicles their Bodies Rajesh Choudhary 8/16/20154

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 8/16/20155

CENVAT Credit Motor Vehicles As Capital Goods Specified Motor Vehicles + Other Motor Vehicles to Specified Service Providers Other Motor Vehicles to All Service Providers Rajesh Choudhary 8/16/20156

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 All Service Providers Rajesh Choudhary 8/16/20157

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 All Service Providers + Manufacturer/Insurer Rajesh Choudhary 8/16/20158

CENVAT Credit Rules Capital goods removed after use or removed as scrape/waste Applicable from 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 8/16/20159

CENVAT Credit Document Capital goods and Inputs Allowed when received in premises Delivered to Service Provider/Manufacture with Documentary Evidence Rajesh Choudhary 8/16/201510

Refund of CENVAT Credit Rule 5 redrafted Rajesh Choudhary Refund amount = Export turnover of services Net CENVAT CreditX Total turnover 8/16/201511

Refund of CENVAT Credit Value of Export Service Rajesh Choudhary For Payments received for Exports completed - Advance for Exports Advance for Exports Exports to be completed 8/16/201512

Refund of CENVAT Credit Total turnover Export turnover of Service + Inputs removed as such not capital goods Rajesh Choudhary 8/16/201513

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 Rajesh Choudhary CENVAT Credit 8/16/201514

Value of Service Rajesh Choudhary Service normal rate & Service taxed under abatement Value as per Section 67 Service special rate special rate Grossed up by Normal Rate Trading a)10% of COS or a)Sale price less COS 8/16/201515

Sample Profit & Loss A/c Rajesh Choudhary Commission on sale of air tickets 100 L (taxed paid on basic fare) Tour operations20 L (packaged tours) Outbound tours30 L (payment in Forex) Trading of goods50 L Commission to Sub agents70 L Cost of local tour packages purchased15 L Cost of outbound tours purchased 25 L Cost of goods purchased 48 L Overheads 50 L 8/16/201516

Value of Commission Income Taxable Service Commission Income100 L Basic Fare 50 L Service 0.6% 50L X 0.6%30000 Value X 100/103 L Rajesh Choudhary 8/16/201517

Value of Tour Operations Exempted Service Tour Operations Income 20 L Service 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 8/16/201518

Value of Trading Income Exempted Service Trading Income 50 L Purchases 48 L Cost of Sales 45 L Opening Stock0 + Purchases48 L - Closing Stock 3 L Rajesh Choudhary 8/16/201519

Value of Trading Income Exempted Service Higher of (a) and (b) (a)Sales less COS 50 L – 45 L5 L (b) 10% of COS 45 L X 10% 4.5 L Value5 L Rajesh Choudhary 8/16/201520

CENVAT Credit eligible Rajesh Choudhary Commission to Sub agents70 L (35 L X 0.6%)21000 Cost of local tour packages15 L (15 L X 75% X 10%) Cost of outbound tours25 LNil Cost of goods purchased 48 L Nil Overhead (50 L X 10%) 50 L Total Credit /16/201521

How much to avail Exempted Services25 L Trading & Tour operations Taxable Services33 L Commission & Outbound Tours CENVAT Credit allowed – {25 L/(33 L + 25L) X } = Rajesh Choudhary 8/16/201522

Input Service Distributor Rajesh Choudhary Common Credit Pro rata basis Credit related to exempted unit No distribution Credit exclusively related to one unit No distribution to other units 8/16/201523

CENVAT Credit Rules Purchased in 2009 Credit availed by CA 10 L No tax liability till 2012 Earlier Credit to be reversed with Interest Now Credit to be reversed without Interest Applicable from 17 March 2012 Rule 14 Rajesh Choudhary 8/16/201524

Reverse Charge Applicable from date to be Notified After enactment of Finance Bill, 2012 Rajesh Choudhary 8/16/201525

Reverse Charge  Telecommunication  General Insurance Auxiliary  Insurance Auxiliary Service by agent  Import of Service  Goods Transport Agency Service  Mutual Fund Distributors  Sponsorship Service EarlierNow               Rajesh Choudhary 8/16/201526

Reverse Charge by Individual Advocates Service to Business Entity TaxNil 100% Rajesh Choudhary 8/16/201527

Reverse Charge by Arbitral Tribunal Service to Business Entity Tax Nil 100% Rajesh Choudhary 8/16/201528

Reverse Charge by Government/ local authority Support Service to Business Entity Tax Nil 100% Rajesh Choudhary 8/16/201529

Reverse Charge Rent a Cab Service to Body Corporate Tax (abetment) Nil 100% by Individual/ proprietary firm/HUF by Partnership firm/LLP Tax 60% 40% Rajesh Choudhary 8/16/201530

Reverse Charge Manpower Service to Body Corporate by Individual/ proprietary firm/HUF by Partnership firm/LLP Tax 25% 75% Rajesh Choudhary 8/16/201531

Reverse Charge Works Contract Service to Body Corporate by Individual/ proprietary firm/HUF by Partnership firm/LLP Tax 50% 50% Rajesh Choudhary 8/16/201532

CENVAT Credit Document Credit allowed on Invoices + Challans used for payment of Tax under Reverse Charge Rajesh Choudhary 8/16/201533

New Abatement & Valuation Scheme Applicable from date to be Notified enactment of Finance Bill, 2012 Rajesh Choudhary 8/16/201534

New Abatement & Valuation Scheme Rajesh Choudhary Works Contract Service Composition 4.8% + Cess on full value Value = Gross Amount less Sale of/ Transfer in property Exemption Original work 60% Completion work 40% Land included 75% No Credit of Inputs 8/16/201535

New Abatement & Valuation Scheme Rajesh Choudhary Existing Abatement NA Proposed Abatement 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 8/16/201536

New Abatement & Valuation Scheme Rajesh Choudhary Existing Abatement Proposed Abatement Convention center/Mandap + Catering Pandal + Catering Restaurant Outdoor Catering Credit of Capital Goods and Input Services Allowed Inputs (food items) not allowed 8/16/201537

New Abatement & Valuation Scheme Rajesh Choudhary Existing Abatement 50 NA Slabs deleted Proposed Abatement Hotels Airlines Credit of Input Services Allowed Inputs & Capital Goods not allowed 8/16/201538

New Abatement & Valuation Scheme Rajesh Choudhary Existing Abatement Proposed Abatement GTA Rent a Cab Chit Fund Goods by Vessel Credit of Capital Goods, Input Services and Inputs not allowed 8/16/201539

New Abatement & Valuation Scheme Rajesh Choudhary Existing Abatement Proposed Abatement Tour & Travel Package Tour Hotel Accommodation Unpackaged Tour Credit of Capital Goods, Input Services and Inputs not allowed 8/16/201540

Rajesh Choudhary CHOUDHARY & ASSOCIATES CHARTERED ACCOUNTANTS