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Cenvat credit treatement for non moving stock

Joe 13 (CA Job) (56 Points)

21 November 2008

Hi,

Just wanted to know what treatment should be given the Cenvat Credit availed on stock which has become slow moving and non moving. Also what should be done if the purchase was an import purchase...

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4 Replies

kalpesh (Article Assistant) (32 Points)
Replied 21 November 2008

Originally posted by :Joe 13
"	Hi, Just wanted to know what treatment should be given the Cenvat Credit availed on stock which has become slow moving and non moving. Also what should be done if the purchase was an import purchase...	"

Hi, If stock has been fully written off or full provision has been made in the books of accounts then u will have to pay cenvat credit equivalent to cenvat credit taken. However, on subsequent utilization of such stock u can again avail cenvat credit equivalent to duty paid at the time of provision. However, there is no need pay duty if stock has not been fully written off or full provision is not made.

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Vijay K. Agrawal (Service) (608 Points)
Replied 26 November 2008

Dear Joe,

wrting off in the books of account does not have any bearing on excise duty. cenvat is availaled at the time of purchase of input and Excise duty is paid on the removal of the stock. untill unless you will not removed from the factory, no ED is payable.

you can carry over stock at nomiinal value.

(Guest)

There is provision under rule 5 B of cenvat credit rule 2004 for written off goods. If the goods were written off or provison are made for written off goods or non moving goods, cenvat credit involved on inputs or capital goods must be reveresed. For fisnihed goods see rule 5 C of cenvat credit rule 2004