CENVAT CREDIT

[Gopalarathnam Muralidharan]

Facts of the issue:

1) Prior to 1.7.12, a client was under works contract (compounding scheme)

2) Did not avail on any cenvat credit on input services and on capital goods

3) Departmental audit and CERA audit also completed upto 31.3.12

4) The client was executing both taxable and exempted services during that period

5) Post 1.7.12, the client follows actual labour charges and actual material under Works contract service for the contract entered afresh.

Querry

1) Can we avail cenvat credit for the period relating to 2009-10 to 2011-12 for which Departmental audit and CERA audits were over

2) what are the possible problems that may arise by availing CENVAT Credit now

AI Summary

Client Advised Against Claiming Past CENVAT Credit Due to Filed Tax Returns and Income Tax Benefit Reversal Issues A client previously under a works contract compounding scheme did not claim CENVAT credit on input services and capital goods from 2009-2012. After audits were completed up to March 2012, the client began using actual labor and material costs for new contracts post-July 2012. The client inquired about claiming CENVAT credit for the earlier period. The response advised against this, noting that claiming CENVAT credit now would require reversing previously claimed income tax benefits, which is not feasible since tax returns have already been filed.