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Q.

What is cenvat credit? Is there any difference between cenvat and modvat?

Tags: money, education, science
Asked by joyesh chakraborty, 10 Jan '10 10:22 pm
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Answers (4)

 
1.

In India, an excise tax is levied on the manufacturer of goods when those goods leave the place of manufacture. Formerly called the Central Excise Duty, this tax is now known as the Central Value Added Tax (CENVAT). Manufacturers may offset duty paid on materials used in the manufacturing process by using that duty as a credit against excise tax through a process known as Central Value Added Tax Credit (CENVAT Credit). The offsetting process was formerly known as Modified Value Added Tax (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
Answered by Shikha Aggarwal, 10 Jan '10 10:33 pm

 
  
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2.

CENVAT (Central Value Added Tax )Credit Meens, Input tax of
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
Answered by Musfer, 10 Jan '10 10:24 pm

 
  
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3.

No
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
Answered by galib mirza, 16 Jan '10 02:09 pm

 
  
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4.

Tax levied on manufacturer goods(like raw materials ,packing materials fixed assets etc )are known as cenvat credit..there is no difference between cenvat and modvat .both are levied on manufacturer goods.
Source: boooks
Answered by Akes Kalra, 14 Mar '12 05:20 pm

 
  
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