CENVAT Credit by NBFC or Banking Co.

[PANKAJ GROVER]

As per amended CENVAT Credit Rules, 2011, NBFC or Banking Co is obligated to pay an amount equal to 50% of the CENVAT Credit availed. Whether they have to pay by cheque or they can utilize cenvat credit to pay the amount?

Regards

 

RAPG & Co.

[ROHAN THAKKAR]

Dear Sir,

NBFC or Banking Co can pay the amount either by cheque or by utilizing cenvat credit to pay the amount. 

In that regard, Explanation II to Rule 6(3) of Cenvat Credit Rules, 2004 clearly provides this which has been reproduced below:

 

Explanation II. - The amount mentioned in sub-rules (3), (3A), (3B) and (3C), unless specified otherwise, shall be paid by the manufacturer of goods or the provider of output service by debiting the CENVAT credit or otherwise on or before the 5th day of the following month except for the month of March, when such payment shall be made on or before the 31st day of the month of March.

 

Regards,

Rohan Thakkar

[email protected]

[NEERAJ KUMAR, RANCHI]

It appears that your query is a little deviated. NBFC or Banking co. is allowed to take cenvat credit only upto 50% and not as you said that obligated to pay 50 % of the credit. This is as per my understanding, if there is any further query you can mail me.

[NEERAJ KUMAR, RANCHI]

It appears that your query is a little deviated. NBFC or Banking co. is allowed to take cenvat credit only upto 50% and not as you said that obligated to pay 50 % of the credit. This is as per my understanding, if there is any further query you can mail me.

[sv bhasker]

Sir,

(3B) in explanation II is about reversal of credit by  Banking co. If that is so, Banking co needs to take 100% credit in a month and pay back 50% of the credit either through debit of cenvat credit  or otherwise ( means cash payment).

Hence I I agree with the view expressed by Mr Rohan.

AI Summary

CENVAT credit reversal for NBFCs and banks can be paid by debiting credit or otherwise by due dates. Where the rules require payment or reversal of an amount related to CENVAT credit by banking companies and NBFCs, the amount may be paid by debiting the CENVAT credit account or by other means (including cash), and must be remitted by the specified monthly due date, with a special due date for March.