Can Education Cess be paid by debiting from CENVAT Balance?
SINCE DDT carried this piece last week (in DDT 2210 & 2211), we have been flooded with mails and calls. Of course the departmental officer has no doubt that DDT and all others are wrong and education cess cannot be paid from the credit of BED. As noted by a Netizen, the ST-3 Return specifically allows it and there is no reason why it should not be allowed for Central excise.
An assessee writes in:
Many industries are facing problem of shortfall in Edu Cess and SHE Cess due to exemption given to it from last year on CVD. Many MNCs are importing more than 50% of raw material. At such time Industry should optimise use of available cenvat credit. I have seen many companies where huge cenvat credit is lying unutilised. Due to less exports they are not able to utilise it. I have been using this option from 2011. I have received many queries from internal and statutory auditors on this. But I have given them the case laws and legal position on this issue.
Regarding ER-1 return, I have not faced in problem while uploading as the total cenvat utilised is matching with duty payable.
Lets hope that CBEC would come with clarification on it.
Is the Board listening?