CENVAT RELATING TO R & D EXPENSES

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Mrs.N. Alamelu

Mrs.N. Alamelu (Querist)
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01 August 2007 Can we take CENVAT credit/ VAT credit in respect of R & D related expenses.

Sanjeev Kumar Varshney

Sanjeev Kumar Varshney (Expert)
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01 August 2007 In my opinion YES, as R&D is manufacturing related activity and will be entitle for Cenvat / VAT credit.

CA Mani

CA Mani (Expert)
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02 August 2007 Dear Mr.Sanjeev, My opinion abt R&D is that When R&D ends, Manufacturing Starts.

I dont think that R&D is manufacturing related and Cenvat Credit Can be availed.

Can You Plz clarify me in this regard.

CA Prasanna Krishnan V

CA Prasanna Krishnan V (Expert)
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05 August 2007 Dear Madaml

Rule 3 (1) read with Rule 2 (k) of CENVAT Credit Rules 2004 clearly allow input credit only when IP/ CG or input service is directly or indirectly related to FP/output service.

R & D expenses can not satisfy so easily the aforementioned requirement.