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

Cenvat credit of Krishi Kalyan Cess limited to service providers; manufacturers should expense or retain pending eligibility.
Credit of Krishi Kalyan Cess can be used only for payment of KKC on output services and is not available for services under the Reverse Charge Mechanism; manufacturers therefore cannot presently utilise KKC credit. Manufacturers may either park the KKC as an asset in accounts pending possible future eligibility-accepting balance-sheet inflation-or expense it immediately, with any later change in law requiring reclassification to Cenvat credit.