what is CENVAT CREDIT ?

[prakashsinh gohil]

what is CENVAT CREDIT ? AND HOW IT IS TAKEN FOR THE ENGINEERING GOODS?

[Vivek Harsh]

CENVAT stands for Centralized Value added Tax.

Engineering goods if classified as Input goods 100% credit in the year of recipt. Rule 2(k) of CCR, 2004,

If classified under Chapter 82, 84, 85 of CETA be treated as Capital goods and 50 credit in the year of receipt  and 50% in next year. Rule 2(a) of CCR, 2004,

AI Summary

Cenvat credit entitlement for engineering goods depends on classification, determining whether full or staged credit is available. CENVAT credit permits recovery of tax paid on inputs against excise liability. Engineering goods classified as input goods qualify for full credit in the year of receipt under Rule 2(k) of the Cenvat Credit Rules, 2004. Engineering goods classified under Chapters 82, 84 or 85 and treated as capital goods attract staged CENVAT credit, with half the eligible credit in the year of receipt and the remainder in the following year under Rule 2(a) of the Cenvat Credit Rules, 2004.