Full form of CENVAT is Central Value Added Tax


Let's take an example to understand what is the meaning of CENVAT Credit

We know that

Output – Input=Excise Duty Payable

Similarly,

Output – Input=Service Tax Payable

This Input is called Cenvat Credit

 

What taxes are covered in CENVAT?

Cenvat is the input of excise ,service tax and some other duties.

Both service tax and excise have same department, hence Service Provider gets input of excise and vice versa

 

Different Types of CENVAT Credit

Cenvat Credit is available on

  • Inputs
  • Capital Goods
  • Input Services

Different types of CENVAT

Meaning in Simple Language

Inputs

Excise duty on Purchases

Capital Goods

Excise Duty on Machines

(Available in 2 years ,1/2 every year)

Input Services

Service Tax on Input Services

  1. Indirect Tax
  2. Cenvat Credit
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides GST and Tax E-filinf training in Delhi. Register now.