Quiz show cenvat

Quiz Showcenvat

Question and Answer Samples and Techniques

T.VENKATARAMANAN.FICWA.FCS.

04/11/2023 1

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TRUE or FALSE?TRUE or FALSE?

CENVAT MEANS CENTRAL VALUE ADDED TAX

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Excise duty is also known as cenvat

According to sec 2A the expressions duty, duty of excise,Duties of excise shall be construed to include a reference to cenvat .

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Cenvat scheme is used to achieve the aim of levying tax only on “value added” at each stage

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State the difference between vat &cenvat

• Credit /set off all taxes on all bought out item

•Allstages vat

• onlyED& addl duties on inputs ,capital goods & input services

• Manufacturer or service provider

Cenvat

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Who are eligible? & what are the taxes covered under cenvat?Under rule 3(1),a manufacturer, producer of final product

& provider of output service shall be allowed to take output credit.EOU s can also avail Cenvat credit.

The cenvat credit is of specified duties like Basic ED,special, AED,

NCCD,EC,SEC,SERVICE TAX,CVD ON IMPORTED GOODS ETC.

04/11/2023 7

State the high lights of the scheme.

1)Available only to manufacturer & input service provider

2)Scheme grants credit of duty paid on inputs or input services & capital goods

3)Credit will be available on RM, consumables,packing,fuel etc.

4)But not on HSD,LDO& MOTOR SPIRIT .5)Exempted goods & services not eligible.

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SERVICE PROVIDER & MANUFACTURERS is there any difference?

yes in the case of manufacturers ,they are eligible both direct or indirect use.In the case of service provider

they are eligible only on inputs directly used.

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THE CONDITION OF USE OF GOODS INSIDE THE FACTORY IS NOT APPLICABLE TO SERVICE PROVIDER.

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CAPITAL GOODS ARE NOT INPUTS

BUT PARTS & COMPONENTS CAN BE INPUTS.

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All input services relating to all activities relating to business are eligible for cenvat credit.

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Explain the definition of input u/r2(k)

The definition of input under rule 2(k) falls into 2 parts

They are (1)Meaning part(2)Exclusion part

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List items falling under (a)meaning part(b)exclusion part

1)Meaning part: a) goods used in factory for Manufacture (b)accessories used in

warranty ( c )generation of electricity (d ) all goods

used in providing out put serviceExclusion part : LDO; HSD;motor spirit, capital

goods , motor vehicle, personal use of employee,

Goods not having any relation with the final product

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Cenvat credit is allowed on input which becomes waste & is sold as scrap

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What is lease tax?

Lease tax is a tax on transfer of right to use goods .under vat laws it is treated as

deemed sale

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WHAT ARE THE SERVICES WHICH ARE SPECIFICALLY EXCLUDED UNDER CLAUSE A

1)ARCHITECT SERVICES 2)PORT SERVICES3)AIR PORT SERVICES 4)OTHER PORT SERVICES5)COMMERCIAL & INDUSTRIAL CONSTRUCTION6)CONSTRUCTION OF RESIDENTIAL COMPLEX

7)WORKS CONTRACT SERVICE

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Mode of credit ?

1)On receipt of input2)No one to one correlation

3)Credit on the basis of documents

4)Burden of proof lies with the manufacturer /service provider

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Define input:

1)All goods used in the manufacture of final product

2)Includes accessories cleared with final product

3)Goods used for providing free warrantee

4)Used for generation of electricity/steam for captive use5) Goods used for any output

service.

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Service tax is leviable under section-66(B) of the finance act.

Inserted with effect from 01/07/2012

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Write short notes on

1)Output service (2)jobwork(3)exempted goods (4)exempted services (5)final products

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Cenvat credit to be reversed when capital goods are removed (a)w/o use. (b)after use

Illustration: purchased capital goods for Rs 10 lakhs + Ed 12.36% on 1/04/2012

1)Removed & sold for Rs 800,000/= on 12/04/20132)After use.

3)For Rs 5000/ on 12/04/2023

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As per rule 3 (5)since the goods were removed with out use , cenvat credit availed namely Rs 123,600/= will have to be reversed.(B) 123,600/= - ( 2.5% X 5 X123,600) = 108,150 or 12.36% of 800,000/= 98,880 which ever is higher . ( c ) no reversal.But duty to be paid on Rs 5000/= at the applicable rates

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Cen vat credit of duty paid by EOU

Calculate the cenvat credit available to an EOU

AV Rs 20 lakhs BCD 10% ; ED 12 % EC& SEC 2% & 1%

State VAT 4%

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1 AV Rs 20,00,000

2 CD @ 5% 100,000

3 CVD @ 12 % 252,000

4 Ec 7, 040

5 SHEC 3,520

6 Addl, CD (exempted )since vat is payable

7 Duty payable 362,560

8 Cess (2+1) % 10,877

9 Total duty as per notification 23/2003 For clearance to DTACenvat credit = 252,000+ 7,251 +3626=

373,437

262,877

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Goods used primarily for personal use or consumption of an employee is not covered.

Input destroyed /pilfered & shortage also is not covered

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H.O./R.O. will have to register as “input service distributor”

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A.

B.

C.

D.

E.

In the case of capital goods 50% of credit is available in the current year

None of the above

Any of the above

@ of 10% every subsequent years

25% in the next year & another 25% in the next to next year

50% in the next year

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Motor vehicles are capital goods for manufacturers but not couriers etc.

04/11/2023 29

A.

B.

C.

D.

E.

Specified documents for credit of duty includes

Manufacturer’s invoice

Supplementary invoice

Bill of entry

Dealer’s invoice

All the above

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What are the services included wef 1/4/2011?18 services have been included wef 1/4/2011.

They are1)modernization,2)advt7 sales promo3)market research

accounting ,auditing & financing purchase & storage4)Recruitment, coaching,

trg,computer networking,5)credit rating, share registry ,legal & security services &

so on but EXCLUDES CONSTRUCTION & MOTOR VEHICLES.

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THE CENVAT CREDIT POOL CONSISTS OF?

1)AED 2)NCCD 3)EC,SHEC,4)ADC, 5)ADET,6)ADDL DUTY UNDER CUSTOMS

7)CLEAN ENERGY CESS ETC

04/11/2023 32

FROM THE FOLLOWING IDENTIFY WHICH OF THE CREDITS ARE AVAILABLE FOR USE IN THE CURRENT YEAR.

GOODS DUTY YES /NO

POLLUTION CONTROL 25,000 12,500

OFFICE EQUIPMENT 15,000 NIL

STORAGE TANK 10,000 5000

PAINT FOR M/C 6,000 6000

PACKING MATERIAL 4,000 4000

LUBRICATING OILS 8,000 8000

HSD 7,000 NIL

FREE WARRANTY PARTS

15,000 15,000

04/11/2023 33

CAPITAL GOODS REMOVED AS SUCH

INPUT REMOVED AS SUCH

CAPITAL GOODS REMOVED AFTER USE

If removed as scrap

Computer peripherals

As per Rule 3(5)/5A

CREDIT-2.5%FOR EACH QUARTER

AMOUNT = CREDIT AVAILED

AMOUNT OF CREDIT AVAILED

Duty applicable for scrap value

MATCH THE FOLLOWING

Define input service provider

“Input Service Distributor” has the meaning assigned to it in clause (m) of rule (2) of CENVAT Credit Rules, 2004:- “Input service distributor” means an office of the manufacturer or producer of final products or provider of output service, Which receives invoices issued under rule 4A of the Service Tax Rules, 1994 towards purchases of input services and issues invoice, bill or as the case may be, challan for the purposes of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, as the case may be

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Reversal of cenvat credit

p/106

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What is reverse tax credit ?

Goods in respect of which input tax credit has been availed if

subsequently used fully or partially for non specified purpose the input

tax credit so availed shall be reduced for the period during

which such utilization has taken place.This is known as reverse tax

credit.

Circumstances under which no reversal required

P/107.no reversal is required if final product is exported or supplied to UN Agencies or to EOU /STP/EHTP

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Is cenvat credit available in respect of service tax paid on use of cell phones ?

Yes ; provided that the mobile phone service is used for

providing output service used in or in relation to manufacture.of

finished product..

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Sample Question and Answer

• The following slides are example questions using the layouts in the Quiz Show template. View them in slide show to see the answer animations.

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The Sun is a star.

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What is the name of our galaxy?

The Milky Way

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How many planets in the solar system have rings?

Four planets.

Jupiter, Saturn, Uranus, and Neptune all have rings.

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A.

B.

C.

D.

E.

What is inertia?

All of the above

The speed at which an object falls

Measurement of electrical resistance

A ratio between mass and velocity

Resistance to motion or change

04/11/2023 45

Match the device to what it measures:

Stop Watch

Scale

Thermometer

Speedometer

Odometer

Distance

Temperature

Elapsed Time

Weight

Rate of Travel

Education

Quiz show cenvat