Zuhi Ltd. has imported a machine to be used for providing a taxable service. The assessable value of imported machine as approved by customs is ₹5,00,000. Customs duty @ 10% is payable. Further, if the machine is manufac
CS Professional · Advanced Tax Laws and Practice · PYQS · December 2016
Zuhi Ltd. has imported a machine to be used for providing a taxable service. The assessable value of imported machine as approved by customs is ₹5,00,000. Customs duty @ 10% is payable. Further, if the machine is manufactured in India, excise duty @ 12% is leviable on such machine. Education cess and secondary and higher education cess are applicable as per prevailing rates. Special CVD @ 4% is also payable on such machine. You are required to Examine whether Zuhi Ltd. can avail CENVAT credit and if yes, how much CENVAT credit can be availed.
Answer & Explanation:
As Zuhi Ltd. is a service provider, it can avail Cenvat Credit only for CVD of ₹66,000 and not of special CVD of ₹24,779.
Topics: Indirect Tax
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