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10 December 2008

Is it is Necessary to claim Cenvat on Purchase of a Excisable Product. Please Suggest me with explaination that what are the Basic condition for availing Cenvat

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9 Replies

Prabeer (B. COM (H) CA & CS Final) (5484 Points)
Replied 10 December 2008

Yes.

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kamini (ca final student) (28 Points)
Replied 10 December 2008

there must be input output relationship.

kamini (ca final student) (28 Points)
Replied 10 December 2008

in case of export u cant claim cenvat. u will receive the benefit of dutydrawback. to claim cenvat there must be domestic sale.

Ankit kumar (Student) (1691 Points)
Replied 10 December 2008

yes u must claim it

CA. SUJAL MEHTA (Service) (3316 Points)
Replied 10 December 2008

yes

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Manish Gaikwad (Service) (36 Points)
Replied 10 December 2008

Originally posted by :Naveen Chand Khulve
"	Is it is Necessary to claim Cenvat on Purchase of a Excisable Product. Please Suggest me with explaination that what are the Basic condition for availing Cenvat	"

i. The first and the foremost condition to be fulfilled before availing Modvat is to ensure that the final product cleared by the manufacturer attracts excise levy. No credit is allowed on inputs used for the final products which are exempt or chargeable to -nil- rate of duty.

ii. Inputs should be duty paid with proof of payment of duty failing which Modvat credit will not be available

S. Banerjee (Practising Cost Accountant. Core area- Central Excise. Service Tax Costing system installation including maintenance of Cost Records and Cost Audit and Management Audit mainly Revenue leakages Audit) (622 Points)
Replied 13 December 2008

Originally posted by :Naveen Chand Khulve
"	Is it is Necessary to claim Cenvat on Purchase of a Excisable Product. Please Suggest me with explaination that what are the Basic condition for availing Cenvat	"

It is your option to avail Cenvat credit or not to avail. If you avail your cost of sales will be less than the assessee who does not avail it.

Thanks,

S. Banerjee

Harshad N Godbole (Article Clerk) (26 Points)
Replied 23 December 2008

Dear Naveen,

It is not necessary that you claim the CENVAT on inputs however if you are manufacturing excisable goods then you can ( ofcourse at your option ) take the credit of cenvat on inputs used in the manufacture of excisable goods.

If you opt for claiming cenvat on inputs as aforesaid then you must adhere to the following conditions -

Receive the inputs into the factory for manufacture [ R-4(1) OF CENVAT CREDIT RULES 2004 ] CCR, 2004 In short
Record the quantitative details and amount of excise taken from the invoice, in the RG-23 register.[ RULE 9 of CCR, 2004 ]
utilize the said credit before 5th of the next month in which you receive the inputs. [ RULE 3(4) OF CCR, 2004 & RULE 8 OF CENTRAL EXCISE RULES 2002 ]

Regards,

Harshad N Godbole

S.P.Mahanta (Internal Auditor) (647 Points)
Replied 24 December 2008

Availment of Cenvat Credit on purchase of excisable product is at the option of the manufacturer. Cenvat credit is a benefit provided to avoid cascading effect of duties where the manufacturer gets facility to set off the duty paid on inputs/capital goods against excise liability on finished product. This helps in lower cost of goods to consumer. However, the purchase must be from either the manufacturer/ 1st stage/2nd stage dealer and in excise invoice, showing ecc no, date/ time of removal and authenticated by responsible official.