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Issue relating to Credit of taxes

CA Ashish Sodhani (Chartered Accountant) (104 Points)

26 May 2011

Hello friends,

I have a query reting to issue of transfer of credit and liabilities and other related procedures to be followed in case of a slump sale i.e. transfer of undertaking under excise (Rule 10 of CCR 2004), VAT and Service tax.

pls rply asap.

Thanks in advance

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1 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 27 May 2011

Rule 10. Transfer of CENVAT credit. - (1) If a manufacturer of the final products shifts his factory to another site or the factory is transferred on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture with the specific provision for transfer of liabilities of such factory, then, the manufacturer shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated factory.

(2) If a provider of output service shifts or transfers his business on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the business to a joint venture with the specific provision for transfer of liabilities of such business, then, the provider of output service shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transferred, sold, merged, leased or amalgamated business.

(3) The transfer of the CENVAT credit under sub-rules (1) and (2) shall be allowed only if the stock of inputs as such or in process, or the capital goods is also transferred along with the factory or business premises to the new site or ownership and the inputs, or capital goods, on which credit has been availed of are duly accounted for to the satisfaction of the Deputy Commissioner of Central Excise or, as the case may be, the Assistant Commissioner of Central Excise.

- you have to seek departmental supervision for verification of stock and capital goods of previous company as per records maintained and then they will allow transfer of credit in new company.