Cenvat reversal

[Debtosh Dey]

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

AI Summary

Cenvat reversal input-output ratio must include exported goods in the denominator, while reversal targets traded services only.
Exported goods are dutiable and must be included in the denominator when computing the input-output ratio for Cenvat apportionment, while credit attributable to inputs used for exports need not be reversed. Where chosen, a composition payment based on the value of trading services is an alternative to formulaic apportionment. If detailed apportionment is used, the formula allocates credit to exempted services by reference to the ratio of exempted service value to total dutiable output value (including exports), and reliance on an auditor's certificate reflecting actual consumption may be required.