Utilisation of unclaimed cenvat

[Guest]

Dear Sir, Suppose a Co. has opted to take Cenvat credit on % basis .i.e provisional ratio of 2007-08 income basis and reversed Cenvat for Exempted portion viz Rs. 100 is admissable but 7% reversed on the basis of ratio ( Exempted : taxable)and out of balance Rs. 93 one has utilized Rs. 50 only and thus balance untilized cenvat is 43 . On 31.03.09 recalculate ratio on the basis of actual income and exemption ratio become 20% accordingly he reversed further Rs. 13 and now unutilized amt is Rs. 30. My query is : 1. Can he utilize unclaimed Rs. 30 in 2009-10 for pymt or he shd reverse it and book exp? 2. Should he inform this to dept before 30 June Manoj

[Prabhakar Vennalaganti]

There is no such provisions under Cenvat Rules to avail on percentage base.

[Guest]

Sir, Actualy percentage is calculated as per Rule 6 ( 3) this is cenvat for common input and percentage is Exempted :Actual basis Thanks Manoj

[Guest]

If you by the scheme of rule 6(3) read with rule 6(3A) carefully, the purpose of formula is to reduce the amount of cenvat credit by an amount which is allocatable towards exempted services. Therefore, after reducing the amount, the balance amount is eligible for utilization without any limit. further the calculations, adjustments etc. should be intimated as per procedure prescribed therein.

AI Summary

Cenvat credit apportionment: remaining unutilized credit after exempted share adjustment is eligible for utilization, with required intimation. Cenvat credit apportionment requires applying the rules for common inputs to allocate and reduce credit attributable to exempted services; after deducting the exempted share the remaining credit is available for utilization without a specific limit. Recalculations that change the exempted share must be adjusted under the prescribed procedure and intimated to the tax administration.