1. Welcomes you all

2. chennai – coimbatore – bangalore - hyderabad
An insight into …
CENVAT CREDIT RULES, 2004 by
swamy associates
chennai – coimbatore – bangalore - hyderabad

3. Features
Hitherto…
Manufacturers were claiming credit of duties paid on inputs
and using it for payment of their excise duty liability
on their final products.
Service providers were claming credit of service tax
paid on their input services and using it for payment of
their service tax liability on the services rendered by them.
Hereinafter …
If you are a manufacturer, Service Tax paid on input services,
can be adjusted against your excise duty liability.
If you are a service provider, Excise duties paid on inputs
can be adjusted against your service tax liability.

4. Let us understand certain important terms

5. Inputs
In case of manufacturers :
All goods, except Diesel and Petrol
used in or in relation to the manufacture of the final products
whether directly or indirectly
whether contained in the final product or not.
In case of service providers :
used for providing output service.

6. Capital goods
Goods falling under Chapters 82, 84, 85, 90, 6802 and
(b) Pollution control equipment.
(c) Components, spares and accessories of the above.
(d) Moulds, dies, jigs and fixtures.
(e) Refractories and refractory materials.
(f) Tubes, pipes and fittings thereof.
(g) Storage tank.
Used in the factory of manufacture of the final products
Or for providing output service.
Motor vehicle is declared as capital goods for certain categories of service providers.

7. Input service
Any service
Used by a service provider for providing output service.
Used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and their clearance from the place of removal including certain specified services.

8. Output service
Any taxable service for which a service provider is liable
for payment of service tax.
At present Service tax is liable on the following services.

10. First Stage Dealer
A dealer who purchases the goods directly from the
manufacturers / manufacturers’ depot / consignment agent
of the manufacturer – under the cover of an invoice.
Second Stage Dealer
A dealer who purchases the goods from a First Stage Dealer.

11. Input Service Distributor
Office of the manufacturer / output service provider.
Head office, Corporate office, Administrative office, etc.
- Which is receiving invoices for input services.
ISD – To distribute the service tax paid by them, to its various
manufacturing premises (in case of manufacturing units) or to
its various premises from where output services (in case of
service providers) are rendered.

12. A little more peep into the ISD
No requirement of registration, as of now.
Should raise invoices to its various constituents (factories or
service rendering premises, as the case may be) – to distribute the Service tax paid by it, on input services.
Shall maintain adequate records.
Shall file an half yearly return – regarding credit received and distributed.
The total amount distributed shall not exceed the service tax paid by the ISD.
If the service tax paid by the ISD is exclusively in relation to manufacture of exempted goods or rendering of any exempted service, such service tax shall not be distributed.
No norms for distribution.

13. Certain Important procedural requirements
Credit on inputs can be taken immediately.
Credit of Service Tax can be taken, only after making the payment for the bill.
Credit available as at the end of the month/quarter alone can be used for payment of duty for the month/quarter, as the case may be.
If credit is availed on capital goods, the duty portion should not be capitalised, for claiming depreciation.

14. What are the duties / taxes, for which credit
facility is available?
Cenvat Duty (Basic Excise Duty).
Special Excise Duty (SED).
Additional Duty of Excise (Textiles and Textile Articles) {AED(TTA)}.
Additional Duty of Excise (Goods of Special Importance) {AED(GSI)}.
National Calamity Contingent Duty (NCCD).
Additional Duty of Excise on Tea and Tea Waste.
Additional Duty of Customs (CVD).
Education Cess on Excise Duties.
Service Tax
Education Cess of Service Tax.

15. chennai - coimbatore - bangalore - hyderabad
THANKS
s. jaikumar g. natarajan m. karthikeyan
swamy associates
chennai - coimbatore - bangalore - hyderabad