What is cenvat credit? Is there any difference between cenvat and modvat?
MODVAT was replaced by CENVAT w.e.f. 1.4.2000. Principally, there is no difference between CENVAT and earlier MODVAT.
MODVAT contained separate provisions for capital goods, while CENVAT rules combine provisions in respect of capital goods and inputs.
MODVAT required submission of declarations in respect of details of inputs and capital goods. CENVAT does not require any such declaration.
If inputs are cleared as such, MODVAT credit just had to be reversed, while in case of CEN ...more
purchase of Raw Materials, Packing Material, Fixed Assets
and Consumables. This Input tax credit we can setoff the
tax payble which we have to pay to the government
modvat credit means modified value added tax credit. it has been renamed as cenvat credit meaning central excise value added tax. it is not connected to customs duty as such. it is connected to central excise and service tax. cenvat credit as well as service tax is paid on the products manufactured and services provided. the tax paid on inputs, raw materials, capital goods and input services- utilized in manufacture of final products of a manufacturer and services provided are allowed to be deducted/ allowed as credit against the central excise/ service tax liability of a manufacturer/ service provided. the scheme was introduced for avoiding multi level taxation on same product or service, also mcalled cascading effect.
As regards exports, central excise ...more
There is no difference between CENVAT and MODVAT .
MODAVT has been modified and changed to CENVAT
CENVAT credit means, when the manufacturing goods purchased by the company the duty paid by the company , is taken as CENVAT credit and that much amount os eligible for set off against the same