If common input service is ₹ 1,00,000 which caters to taxable output service ₹ 75,000, traded goods ₹ 25,000 (cost ₹ 20,000) and exported goods ₹ 10,000 (cost ₹ 6,000), what is the input-output ratio for reversing Cenvat ? (I am not clear if exported goods should be taken into account for ratio though not for reversal, and if yes, on what value ?)
Debtosh Dey
Clarification on Cenvat reversal: Include exported goods in input-output ratio denominator under Rule 6, reverse 7% on traded goods. A discussion on Cenvat reversal involves a query about calculating the input-output ratio for common input services used in taxable output services, traded goods, and exported goods. The main issue is whether the value of exported goods should be included in the denominator for the input-output ratio, even though they do not require Cenvat reversal. The consensus, supported by multiple replies, is that exported goods should be considered in the denominator as they are dutiable, not exempt. The correct approach involves applying Rule 6 of the Cenvat Credit Rules, with a recommendation to reverse Cenvat at 7% on traded goods. (AI Summary)
TaxTMI 
TaxTMI 
