Till 28.2.2015
Input of Primary Cess and Secondary Cess could not be used to adjust Excise Duty
Input of Primary Cess could be used to pay Primary Cess and input of Shec can be used to pay Shec only
Example
Suppose in Feb,Sales Amount was 80000+ 12% Excise+ Cess and purchase Amount was 100000 12% Excise+ Cess
Prepare Excise Duty Computation in Feb
View answer
| Particulars | Amount | Tax | Primary Cess | Secondary Cess |
| Output Excise duty | 80000 | 9600 | 1600 | 96 |
| Less | ||||
| Input Cenvat | 100000 | 12000 | 2000 | 120 |
| ED Payable | 0 | 0 | 0 | |
| Closing Cenvat | 2400 | 400 | 24 |
From 1.3.2015
Cess on Excise duty was abolished
Now Only Excise duty was payable at 12.5%
Suppose in March,Sales Amount was 140000+12.5% ED
Purchase Amount was 120000+12.5% ED
Prepare Excise Duty Computation in March
View answer
| Particulars | Amount | Tax | Primary Cess | Secondary Cess |
| Output Excise duty | 140000 | 17500 | ||
| Less | ||||
| Input Cenvat | 120000 | 15000 | ||
| ADD | ||||
| Opening Cenvat | 2400 | 400 | 24 | |
| Total Cenvat | 17400 | 400 | 24 | |
| ED Payable | 100 | 0 | 0 | |
| Closing Cenvat | 0 | 400 | 24 |
Hence Closing Cenvat of primary and secondary cess could not be adjusted against Excise duty
Manfacturer has to Pay 100 excise duty and carry forward input of Primary and Secondary cess
It can be adusted against Excise duty
However from 30.4.2015
This closing balance of Primary and Secondary cess can now be adjusted with Excise duty as follows
Suppose in April,Sales Amount was 200000+12.5% ED
Purchase Amount was 180000+12.5% ED
Prepare Excise Duty Computation in April
View answer
| Particulars | Amount | Tax | Primary Cess | Secondary Cess |
| Output Excise duty | 200000 | 25000 | ||
| Less | ||||
| Input Cenvat | 180000 | 22500 | ||
| ADD | ||||
| Opening Cenvat of Primary+Secondary cess | 424 | 0 | 0 | |
| Total Cenvat | 22924 | 0 | 0 | |
| ED Payable | 2076 | 0 | 0 | |
| Closing Cenvat | 0 | 0 | 0 |