Education cess from BED

[Guest]

Is it permissable to debit edu cess from CENVAT credit of BED ?

[Guest]

In my view, Cenvat Credit in respect of the Education Cess can only be used only in respect of Education cess not BED

[RAKESH R]

There is no restriction to utilise the Cenvat credit of BED against payment of Education cess. The restriction is applicable only to duties of excise other than 'basic cenvat duty credit'. Rule 3(4) of CCR says " The cenvat credit may be utilised for payment of (a) any duty of excise on any final product;... Sub rule (7) of Rule 3 of CCR says " Notwithstanding anything contained in sub rule (1) and sub rule (4)........clause (b) restricts the utilisation of all duties such as ADE, CESS SHES etc only against the payment of such duties. In this rule, Cenvat on BED has not been included. Hence, in the absence of any such specific expression in sub rule (7)clause (b)in respect of Basic Cenvat Duty credit, the assessee has every right to utilise the credit of basic cenvat duty for payment of any other duties. S. Gokarnesan advocate Chennai 098400 87349

AI Summary

Debate on Using CENVAT Credit for Education Cess: Rule 3(4) and Sub-rule (7) Interpretation Sparks Discussion A query was raised regarding the permissibility of debiting education cess from CENVAT credit of Basic Excise Duty (BED). One response stated that CENVAT credit for education cess can only be used for education cess, not BED. Another response argued that there is no restriction on using BED CENVAT credit for education cess, citing Rule 3(4) and sub-rule (7) of the CENVAT Credit Rules. The latter response emphasized that the rules do not specifically restrict using BED credit for other duties, allowing its use for education cess.