Post on 15-Dec-2015
As per Rule 6 (1)Cenvat Credit – not allowed – Quantity of Inputs
Used in manufacture – Exempted GoodsMaintain
Separate No Separate Accounts Accounts
No Separate AccountsReverse Cenvat Credit
Option 1: - Pay amount – EQUAL TO CENVAT ATTRIBUTABLE to input Goods/ Services.- Manufacture: 5% of Value – Exempted Goods- Service Provider: 6% of Value – Exempted Output
Services- (w.e.f. 01-04-2012: 6% in both case)
No Separate AccountsReverse Cenvat Credit
Option 2:Proportionate Reversal of Credit
Taken on the Exempted Goods and Services
Solution:Duty Payable: 70,00,000* 14%= 9,80,000Option 1:• Avail entire credit – Rs.10,00,000• Pay 5% - value of exempted goods
i.e. 20,00,000*5%= Rs.1,00,000
TOTAL DUTY PAYABLE: 9,80,000+ 1,00,000= 10,80,000CENVAT Credit Available: Rs.10,00,000____________________________________________Duty Payable through GAR 7 Challan= Rs.80,000_____________________________________________
Solution:Duty Payable: 70,00,000* 14%= 9,80,000Option 2:• Avail proportionate credit –
=10,00,000*70,00,000/90,00,000= Rs. 7,77,777.78
TOTAL DUTY PAYABLE: = 9,80,000- 7,77,777.78 = Rs.2,02,222.22Duty Payable through GAR 7 Challan= Rs.2,02,222.22