Cenvate

Practical Examples on Cenvat

Question – An assessee cleared various manufactured final products during June 2007. The duty payable for June 2007 on his final products was as follows – Basic – Rs 2,00,000 Education Cesses – As applicable. During the month, he received various inputs on which total duty paid by suppliers of inputs was as follows – Basic duty – Rs 50,000, Education Cess – Rs 1,000, SAH education Cess Rs 500. Excise duty paid on capital goods received during the month was as follows – Basic duty – Rs 12,000. Education Cess - Rs 240. SAH education cess - Rs 120. Service tax paid on input services was as follows – Service Tax – Rs 10,000. Education cess – Rs 200 SAH Education Cess - Rs 100. How much duty the assessee will be required to pay by GAR-7 challan for the month of June 2007, if assessee had no opening balance in his PLA account? What us last date for payment?

Answer – Education Cess payable on final products is Rs 4,000 (2% of Rs 2,00,000). SAH education cess payable is Rs 2,000.

The Cenvat credit available for June 2007 is as follows –

Description Basic duty Service Tax Education Cess SAH Education Cess

Inputs 50,000 1,000 500

Capital Goods (50% will be eligible and balance next year) 6,000 120 60

Input Service 10,000 200 100

Total 56,000 10,000 1,320 660

Credit of Rs 66,000 (56,000 + 10,000) can be utilised for basic duty Credit of education cess and SAH education cess can be utilised only for payment of education cess and SAH education cess on final product only.

Hence, duty payable through GAR-7 challan for June 2007 is as follows –

Basic Duty Rs Education Cess Rs SAH Education Cess Rs

(A) Duty payable 2,00,000 4,000 2,000

(b) Cenvat Credit 66,000 1,320 660

Net amount payable (A-B) 1,34,000 2,680 1,340

Last date for payment is 5th July, 2007.

Question - In aforesaid example, calculate duty payable by GAR-7 challan if assessee had following balance in his PLA account on 6-6-2007 (after debiting utilised amount...