Cenvat credit - Bill issued at excess rate

[DINESH AGGARWAL]

We raised bill for customer,by mistake,we charged excess rate, then our customer raised supllementary bill for passing excess cenvat charged, they did not issue D/note because, debit not is not perscribed document for availing cenvat uner Cenvat Credit Rule, 2004. Now, can,we availed cenvat credit on their suppementary bill,but i heared a customer can not raised supplementary bill he can issue only d/note. please reply to us.

[Surender Gupta]

The procedure mentioned in your query is totally against the provisions of Cenvat Credit Rules. If the customer has availed the Cenvat Credit for the excess amount charged by you, there is no option to take is back. You should deposit the amount of service tax (inclusive of excess service tax) to the revenue.

[Madhukar N Hiregange]

Service tax is payable on receipt basis therefore you may correct you original bill. On the amount recived you would be required to pay the servcie tax. If on composite basis you may divide the amount received by 1.102 or 1.224 as the case maybe to arrive ta the basic value. On his d/n or supplementary bill yopu would not be eligible for any credits in my view.

AI Summary

Cenvat credit: supplier cannot neutralise recipient's availed credit by a supplementary bill; excess tax must be deposited. Where a supplier bills at an excess rate and the recipient avails Cenvat credit on the excess amount, the supplier must deposit the excess tax collected to revenue; a supplementary bill or post-facto debit adjustment by the supplier does not automatically negate the recipient's availed credit, and proper documentary and statutory mechanisms are required for reversal.