22 December 2012
Our company have a factory, registered in excise, manufacturing product covered in N/N 1/2011 i.e. non cenvatable item due to paying 2% rate of duty. We want to start trading of an item covered under chapter 26. We will not receive canvatable invoice neither will issue cenvatable invoice for the new item. Now i want to confirm that whether we will have to maintain seprate book of account or not as we do not avail cenvat on RAW Material for both the item? we will have to intimate to department or not? whether we can use seprate invoice book for both the item? plz reply
24 December 2012
Thanks for replying sir, can you please refer me under which section/ rule it is required as for rule 6(1),there was dispute for CENVAT credit, but for our both the activity, cenvat is not allowed?
03 August 2024
In the context of Indian company law and the treatment of CENVAT (Central Value Added Tax) credit, it’s important to distinguish between company incorporation and tax regulations.
### **Company Incorporation:**
For incorporating a company, the requirement to specify the main objects in the Memorandum of Association (MoA) is governed by:
- **Section 4 of the Companies Act, 2013:** This section mandates that the Memorandum of Association (MoA) of a company must state the company’s main objects. The company must specify its primary business activities, which provide clarity on the scope of its operations.
### **CENVAT Credit:**
Regarding CENVAT credit, it pertains to the Goods and Services Tax (GST) and Central Excise laws, not directly to the incorporation process. The eligibility and rules for CENVAT credit are found in:
- **CENVAT Credit Rules, 2004 (under the Central Excise Act, 1944):** This set of rules outlines the conditions under which CENVAT credit can be claimed on inputs and input services.
- **Rule 6 of the CENVAT Credit Rules, 2004:** This rule deals with the apportionment of CENVAT credit in cases where a company’s activities involve both taxable and exempt services. Rule 6 specifies the conditions for maintaining and utilizing CENVAT credit.
- **Rule 6(1) of the CENVAT Credit Rules, 2004:** This rule states that credit cannot be availed on inputs or input services used for exempted goods/services. If your activities are both exempt from CENVAT credit, Rule 6(1) would be relevant in determining that no credit is permissible.
### **Key Points:**
1. **For Incorporation (MoA):** Ensure that the main object clause is comprehensive and aligns with the intended business activities. This is required under Section 4 of the Companies Act, 2013.
2. **For CENVAT Credit (Taxation):** If your activities are not eligible for CENVAT credit, you should ensure compliance with the CENVAT Credit Rules, specifically Rule 6. If both activities are exempt from CENVAT, you should be aware that no credit can be claimed.
### **Summary:**
- **Incorporation Requirements:** Refer to **Section 4 of the Companies Act, 2013** for the requirement of specifying the main objects in the MoA. - **CENVAT Credit Regulations:** Refer to the **CENVAT Credit Rules, 2004**, specifically **Rule 6** for information on credit eligibility and restrictions.
If there are disputes or specific questions related to CENVAT credit, consulting with a tax advisor or legal expert familiar with CENVAT regulations would be beneficial.
CAclubindia
