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: domestic credits may pay education cess, but import cesses reclassified as cess on customs duty are not cenvatable.
Cenvat credit of basic and related duties can be used to pay education cess and secondary and higher education cess, but cesses themselves cannot be credited. After the March 2012 computation change, education and SHE cesses on imports are treated as cess on customs duty (shown in the bill of entry) rather than cess on CVD, and consequently such import cesses are not eligible for Cenvat credit.