Utilization of Cenvat

[Guest]

Dear Sir,

I am working in a company, where we have two division one is called Transport and another one is Clearing.

I have received an Invoice towards Rent and I used to utlize that cenvat against Transport division but for the month of Feb 2015 I have made excess payment for Transport DIvision and Now Insted of going to refund I wanted to utilize that cenvat for Clearing division.

I still have not filled service tax retrun.

Can I utilize that Rent cenvat with clearing divsion, is there any specific rule for utlilizing cenvat.

[Mahir S]

Sir,

I would suggest you to adjust the excess service tax payment in the next service tax return.

[Guest]

Dear Sir,

Thanks for your reply, but the problem is that I have made excess Interest payment and not Service Tax that why I wanted to transfer my cenvat to another division so that the liability in this dept will get increase and excess interest will get adjusted with that liability and in clearing division I would pay less liablity and less Interest.

Please adivse.

[Mahir S]

Sir,

Interest cannot be adjusted against service tax payment.

If interest would have also been adjusted against service tax payments, then assessees would not pay taxes on the due date and pay later with interest, and then utilize the interest too for tax payments

[DR.MARIAPPAN GOVINDARAJAN]

If interest is paid in excess the same may be got refunded from the department.

[Ganeshan Kalyani]

Rent is a common service both for transport division and clearing division and hence cenvat credit of service tax can be utilized for both liability under transport division and clearing division. However as you have said that interest has been paid excess, it can be applied for refund and cannot adjusted with service tax liability.

AI Summary

Cenvat credit utilization permitted across divisions, but excess interest payments are not adjustable and require refund. Cenvat credit for a rent service that is common to both Transport and Clearing divisions may be used to meet the service tax liabilities of either division, subject to proper compliance. Excess payments of interest are not adjustable against service tax liabilities and must be claimed through the refund process; by contrast, an excess tax payment (not interest) can be adjusted in subsequent service tax returns in accordance with filing procedures.