Cenvat Reversal Ratio U/R 6

[Manoj Sharma]

Sir,

We have business of Real Estate ( sale purchase of plots/shops etc and constructin house & sale etc) and have commercial units from which We receive Rental / Maint.

My Query is while calculating ratio for reversal of CENVAT U/R 6 for exempted service , should we require to add diffrence of value of sale purchase of above said plots/shops & house as exempted service ?

 Will the same fall in definition of 'Trading' .

Regards

Manoj Sharma

[NANDKUMAR SAGWEKAR]

If you are using common services for both exempted goods / serices and taxable goods / services , and also taking cenvat credit on services and not maintaining separate accounts of input services utilised for output services then  you are required to reverse the cenvat credit taken on input services / goods  . The reversals would be 6% of value of exempted goods / services .
 

 in case of trading, shall be the difference between the sale price and the cost of goods sold (determined as per the generally accepted accounting principles without including the expenses incurred towards their purchase) or ten per cent of the cost of goods sold, whichever is more.

Thanks

A M SHEMBEKAR

CELL 91-9421187122

Chiplun Dist. Ratnagiri

AI Summary

CENVAT reversal required where common services support exempted outputs; trading treated as margin or cost-based benchmark. Where common input services are used for both taxable and exempted outputs and no separate accounts are maintained, the assessee must reverse CENVAT credit proportionate to the value of exempted goods or services, calculated at six percent of that value. For trading, taxable value is the greater of the difference between sale price and cost of goods sold determined by accepted accounting principles (excluding purchase expenses) or ten percent of the cost of goods sold.