Credit of R & D Cess for import of technology from foreign company

[Manoj Pant]

Experts,

I have one doubt regarding R & D Cess,

When we importing some technology from foreign company, we have to pay R & D Cess, and the same is exemption in service tax.

suppose the work value of 10 lakhs, When we are paying R & D Cess for import of technology and for such case the service tax payable calculated in such manner:

Gross Service tax at the rate of 12 percent on value of Rs. 10 Lakhs   120000/-

Less exemption for R & D Cess Paid                              50000/-

Net Service Tax                                                            70000/-

Add. EC & SHEC at the rate of 3 percent                                                 2100/-

Service tax payable                                                     72100/-

in that case how much CENVAT Credit we can avail. i.e. gross service tax payable(i.e. 12.36) or net service tax payable (7.21) after exemption of R & D Cess.

[YAGAY andSUN]

You can avail CENVAT credit on the Net Service Tax paid by you.

AI Summary

CENVAT Credit Eligibility Explained: Avail Credit on Net Service Tax of 72,100 After R&D Cess Exemption An individual inquired about the calculation of CENVAT credit when paying R & D Cess on technology imported from a foreign company. They detailed a scenario where the gross service tax is calculated at 12% on a transaction value of 10 lakhs, with an exemption of 50,000 for R & D Cess, resulting in a net service tax of 70,000. An additional 3% for EC & SHEC brings the total payable to 72,100. The response clarified that CENVAT credit can be availed on the net service tax paid, which is 72,100.