Cess for purchase return

[vuchcholla Bhaskar]

Dear Sir,

We have purchased child parts last month with excise duties and now this material got rejected, now we need to send the purchase return to party. But as per Notification No.14/2014 dt.01.03.2015 cess is not applicable. Calculation as follows

Assessable Value ₹ 2,00,000

BED 12 % = 24,000

Cess 2% = 480

S.hed 1% = 240

The above duty amount we have taken credit.

Kindly help us the how much duty we need to pay.

Thanks,

Bhaskar

[YAGAY and SUN]

Dear Bhaskar,

You need to pay 12.50% and accumulated credit of CESS, you need to submit a presentation to North Block for getting the refund.

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[vuchcholla Bhaskar]

Dear Sir,

Thanks for the valuable information.

Thanks,

Bhaskar

[SANTOSH SHARMA]

I have a divergent view on this subject. As per Rule 3(5) of CCR, 2004 if anything on which cenvat has been claimed is returned back AS SUCH then credit will be reversed proportionately. If one has availed 12% + 2% + 1% then equal duty will be paid.

Regards,

SANTOSH SHARMA

In my view it is returned the material AS SUCH so you have to pay the duty which the party has charged to you in the excise Invoice, and it is 12 + 2 + 1.

You have to charge in the invoice 12 + 2 + 1.

Till date you have credit balance in your account for 2 % and 1 %.

[JSW CEMENTLIMITED]

Dear Mr. Bhaskar,

Even though Cess is not applicable vide notification 14/2014 dt.01.03.2015, but as per cenvat credit rules, you should pay the duty whatever you have availed credit. There should not be any doubt on this.

V.Venkat Raman

AI Summary

Reversal of cenvat credit required on purchase returns; repay duties equal to credits claimed despite cess exemption.
When goods on which cenvat credit was taken are returned as such, the cenvat credit must be proportionately reversed and the buyer must pay duties equal to the credits previously availed, including any cesses; any refund or recovery thereafter must be sought through the prescribed administrative submission to the revenue authority.