Input tax credits for federal indirect taxes (CENVAT
credit): Certain manufacturers and service providers are eligible to claim a credit (called the CENVAT
credit) for excise duty paid on specified inputs and capital goods used in the manufacturing process as well as service tax paid on purchased services.
Apart from this, in the GST, both the cascading effects of CENVAT
and service tax are removed with set-off, and a continuous chain of set-off from the original producer's point and service provider's point up to the retailer's level is established which reduces the burden of all cascading effects (First Discussion Paper on GST, 2009).
I am totally against the Finance Minister reading out a 'dhobi' list, in his Budget speech, of items on which either CENVAT
or customs duty has been reduced or raised.
Rationalization of the CENVAT
rates by reducing their multiplicity and replacing many of the specific rates by ad-valorem rates based on the maximum retail price of the products.
The rates will be 6 percent with CENVAT
credit or 1 percent without CENVAT
The Government primarily relied on tax cuts, like the 4 percent cut in the CENVAT
rate, to stimulate the economy.
The company is taking this step due to the four percent reduction in CENVAT
The restructuring of excise duty on handsets to include 1 percent excise duty without CENVAT
credit on inputs is welcome as this will encourage handset manufacturing in India, the CII Press Release said.
The company has reduced the price in response to the government's move to reduce CENVAT
by four percent.
Unify the rate structure of CENVAT
and service tax and peg it between the current and the previous higher level.
The review has suggested an expansion of tax coverage and unification of the rate structure of CENVAT
, pegging it between the current and the previous levels.
In his budget speech of July 6, the Finance Minister stated that against the backdrop of limited fiscal space because of reduction of CENVAT
and Service Tax rates, the Government had substantially hiked the Gross Budgetary Support for the annual Plan 2009-10.