UTILISED CENVAT CRDIT TO PAY E.CESS&SHE CESS

[RAM SHARMA]

DEAR EXPERTS,

1. CAN WE UTILISED CENVAT TO PAY EDUCATION CESS AND SECONDARY HIGHTER EDUCATION CESS.

2. SECONDLY CAN WE TAKE CENVAT CREDIT OF EDU.CESS AND SHE CESS ON CVD BECAUSE RECENT CHANGE IN CALCULATION OF E.CESS AND SHE CESS IN FINANCIAL BUDGET 2012.

AI Summary

CENVAT Credit Can Pay Education Cess, Not Vice Versa; Post-2012 Budget Changes Affect Cess Eligibility on Imports An individual inquired about utilizing CENVAT credit to pay education cess and secondary higher education cess, and whether CENVAT credit can be taken on these cesses on CVD due to recent changes in the 2012 financial budget. An expert clarified that CENVAT credit can be used for these payments, but the reverse is not permissible. Another expert noted that from March 17, 2012, the computation method for these cesses on imported goods changed, affecting their CENVAT credit eligibility. The cesses are now calculated on customs duty, not CVD, making them non-Cenvatable. An illustration from a CBEC circular was provided for clarity.