Cenvat Credit of Krishi Kalyan Cess

[Greeshma Vp]

Dear experts,

Please give your opinion on whether a manufacturer can avail Cenvat credit of Krishi Kalyan Cess (KKC). I am aware that as per the provisions, Cenvat credit of KKC can be used only for payment of KKC on output service. It is also clear that cenvat credit of KKC cannnot be used for payment of KKC on services under Reverse Charge Mechanism. So a manufacturer has no chances of utilising KKC.

My query is whether a manufacturer can avail Cenvat credit of KKC in books and hope to claim a refund of the same at a later point of time. Or should the manufacturer write-off KKC as expenses?

Thanks,

Greeshma

AI Summary

Manufacturers currently cannot use Cenvat credit for Krishi Kalyan Cess; only service providers are eligible. Consider future regulations. A discussion on whether a manufacturer can avail Cenvat credit for Krishi Kalyan Cess (KKC) concludes that currently, manufacturers cannot utilize such credit. The credit is only applicable for service providers and cannot be used for services under the Reverse Charge Mechanism. One suggestion is to record the KKC credit in accounts for potential future eligibility, although this could misrepresent current assets. Another option is to write off KKC as expenses, which would provide a deduction benefit. Ultimately, the decision rests with the manufacturer, considering future regulatory changes.