Cenvat Credit on debit note

[sachin borkar]

Dear Sir ,

             One of our supplier raises debit note to us including excise duty for rate difference, Can we take excise duty credit on debit note or can i file refund against that.OR any other source to take availment of credit on debit note, supplier unable to give proper documents.

         Waiting for valuable reply.

[KALYAN CHAUDHARY]

Dear Sachin,

As per

Rule 9 (1) of the Cenvat Credit Rules, 2004, which is reproduced below mentions the documents on the bases of which Cenvat credit can be availed.

Rule 9(1):- The CENVAT credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on the basis of any of the following documents, namely :-
(a) an invoice issued by-
(i) a manufacturer for clearance of -
(I) inputs or capital goods from his factory or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer;
(II) inputs or capital goods as such;
(ii) an importer;
(iii) an importer from his depot or from the premises of the consignment agent of the said importer if the said depot or the premises, as the case may be, is registered in terms of the provisions of Central Excise Rules, 2002;
(iv) a first stage dealer or a second stage dealer, as the case may be, in terms of the provisions of Central Excise Rules, 2002;
Explanation: For removal of doubts, it is clarified that supplementary invoice shall also include challan or any other similar document evidencing payment of additional amount of additional duty leviable under section 3  of the Customs Tariff Act; or
(c) a bill of entry; or
(d) a certificate issued by an appraiser of customs in respect of goods imported through a Foreign Post Office; or
(e) a challan evidencing payment of service tax by the person liable to pay service tax under sub-clauses (iii), (iv), (v) and (vii) of clause (d) of sub-rule (1) of rule (2) of the Service Tax Rules, 1994; or
(f) an invoice, a bill or challan issued by a provider of input service on or after the 10th day of, September, 2004; or
(g) an invoice, bill or challan issued by an input service distributor under rule 4A of the Service Tax Rules, 1994.

Provided that the credit of additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be allowed if the invoice or the supplementary invoice, as the case may be, bears an indication to the effect that no credit of the said additional duty shall be admissible;
Based on the above you can claim Cenvat credit only on the bases of an invoice, Bill, challan, bill of entry, supplementary invoice and not on the bases of a debit note and disallowing the Cenvat credit taken on the bases of a debit note. Rule 15 of Cenvat credit rule prescribes the penalty for wrong availment of Cenvat credit at Rs.2000 or amount of service tax at the discretion of the authority.

 

[Surender Gupta]

In case of manufacturer, for claiming differential duty from the buyer of the, the issuance of supplementary invoice is needed. In case the debit note issued by the manufacturer is containing the all particulars of Invoice to constitute supplementary invoice, you may be allowed to take credit. 

AI Summary

Cenvat Credit on Debit Notes Not Permissible Under Rule 9(1) Unless Details Match Supplementary Invoice Criteria A participant in a discussion forum inquired about the possibility of claiming Cenvat credit on a debit note issued by a supplier for rate differences, including excise duty. One respondent clarified that under Rule 9(1) of the Cenvat Credit Rules, 2004, Cenvat credit can only be claimed based on specific documents such as invoices, bills, or challans, and not on debit notes. Another respondent suggested that if the debit note contains all the necessary details to qualify as a supplementary invoice, credit might be permissible. Penalties for incorrect credit claims were also mentioned.