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http://www.dateyvs.com/example3.htm
Description
Basic duty
Service Tax
Education Cess
Inputs Capital Goods (50% will be eligible and balance next year) Input Service Total
50,000 6,000
1,000 120
200 1,320
100 660
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
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Examples on Cenvat
http://www.dateyvs.com/example3.htm
Basic Duty Rs
2,00,000 66,000
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 for payment of duty for May 2007) - Basic duty - Rs 1,70,000, Service tax - Rs 30,000. Education Cess - Rs 4,000. SAH education Cess - Nil. Answer - If credit was available on 1-6-2007, the total Cenvat credit available for June 2007 is as follows
Description
Basic duty Rs
Service Tax Rs
Education Cess Rs
Opening Balance Inputs Capital Goods (50% will be eligible and balance next year) Input Service Total
30,000
200 5,320
100 660
The duty payable will be as follows Hence, duty payable through GAR-7 challan for June 2007 is as follows
Basic Duty Rs
(A) Duty payable (b) Cenvat Credit (basic plus service tax) Net amount payable (A-B)
2,00,000 2,66,000
(-66,000)
(-1,120)
1,340
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Examples on Cenvat
http://www.dateyvs.com/example3.htm
The credit of education cess of Rs 1,120 is to be carried forward since the credit cannot be utilised for payment of any other duty. Credit of basic duty can be utilised for payment of SAH education cess. Hence, the balance left in basic duty account will be Rs 64,660. Thus, no excise duty is required to be paid for the month of June 2007. Balance carried forward will be as follows - (a) Basic duty - Rs 64,660 (b) Education Cess - Rs 1,120. Question - An assessee cleared his manufactured final products during January 2008. The duty payable for the month on his final products was as follows: Basic duty Rs. 44,000, NCCD Rs. 2,000, 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. 40,000 plus applicable education cess. Service tax paid on input services was as follows: Service tax Rs. 8,000. Education cess Rs. 160. There is no opening balance in his PLA account. How much duty the assessee will be required to pay through account current for the month of January 2008? (ICWA Inter June 2006 adopted) Education Cess payable on final products is Rs 920 (2% of Rs 46,000). SAH education cess payable on final products is Rs 460. Education cess on his inputs is Rs 800 (2% of Rs 40,000)> SAH education cess on inputs is Rs 400. The Cenvat credit available for the month of January, 2008 is as follows
Description
Basic duty
Service Tax
Education Cess
Credit of Rs 48,000 (40,000 + 8,000) can be utilised for payment of any duty. Credit of education cess of Rs 960 can be utilised only for payment of education cess on final product. Credit of SAH education cess of Rs 960 can be utilised only for payment of education cess on final product. Basic Rs Duty NCCD Education Cess Rs SAH Education Cess Rs 460
(A) Duty payable (b) Cenvat Credit (basic plus service tax) Net amount payable (A-B)
44,000
2,000
920
48,000
960
480
(-4,000)
(-40)
(-20)
The credit of basic duty and service tax of Rs 4,000 can be utilised for payment of NCCD of Rs 2,000. Hence for the month of January, 2008, assessee is not required to pay any duty through PLA.
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Examples on Cenvat
http://www.dateyvs.com/example3.htm
He will carry forward following balances for February 2008 - Basic duty - Rs 2,000. Education Cess - Rs 40. SAH education Cess - Rs 20. Question An assessee cleared his manufactured final products during July 2007. The duty payable for July 2007 on his final products was as follows Basic Rs 49,000. NCCD Rs 1,000. Education Cess As applicable. During the month, he received various inputs on which total duty paid by suppliers of inputs was as follows Basic duty Rs 40,000, Education Cess Rs 800, SAH education Cess - Rs 400. Service tax paid on input services was as follows Service Tax Rs 8,000. Education cess Rs 160, SAH education Cess - Rs 80. How much duty the assessee will be required to pay by GAR-7 challan for the month of July 2007, if there was no opening balance in his PLA account? Kept for self study. Question - Sona Ltd. purchased a lathe machine at a cum-duty price of Rs. 18,63,680. The excise duty rate charged on the said machine was 16% plus education cess 2% plus secondary and higher education cess 1%. The machine was purchased on 1-7-2007 and was disposed of on 30-09-2009 for a price of Rs. 10,00,000 in working condition as second hand machine. Calculate the amount of CENVAT credit allowable for the financial years 2007-08 and 2008-09 and also specify the amount payable towards CENVAT credit already taken at the time of disposal of the machinery in the year 2009-10 (CA Final New Syllabus November 2010) Answer Kept for self study.
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