Cenvat Credit 100% - 20% credit on common costs

[Guest]

Cenvat Credit : If we keep separate accounts, we can talk 100% cenvat credit. But in such cases of separate accounts, can we also take 20% credit on common costs such as on Audit Fees ?

[Guest]

No. You can not avail the two facilities together under rule 6(2) and 6(3).

AI Summary

Cenvat credit: separate account treatment and common-cost apportionment are mutually exclusive under rule 6(2) and 6(3). Availability of Cenvat credit for input services requires electing between full credit via separate accounts and proportionate credit on common costs; the two alternatives cannot be exercised together, so a taxpayer must choose one method and may not combine separate-account treatment with apportioned credit for shared expenses.