Budget 2011 will address CENVAT Credit Anomalies - JS TRU, CBEC
THE Joint Secretary, TRU in CBEC, Vivek Johri, while addressing a conference on CENVAT Credit organised by the PHD Chamber of Commerce and Industry, yesterday said that Budget 2011 will look into the problems with regard to CENVAT Credit.
It was pointed out that unending disputes were being generated in respect of Outward transportation, Mobile Phones, Catering Services, Health Insurance for staff, and Repair and Maintenance of residential quarters for staff. The other issues that came up in the meeting were:
1. Non-availability of CENVAT credit when abatement is allowed under the service tax, thus defeating the very purpose of CENVAT Credit, and when manufacturers are also engaged in trading.
2. In the case of payment of service tax against CENVAT Credit under reverse charge leading to huge accumulation of Credit;
3. Condition for availing CENVAT Credit only on payment of value of services and services tax whereas in associated enterprises, tax is payable on accrual basis;
4. Levying of penalty merely means wrong availment of credit even though there was no utilisation of credit; and
5. Non-availability of CENVAT Credit to the service provider for renting immovable property and to the builders providing service related to building/ flats entitled for sale.