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Cenvat credit

27 September 2016

Hi Folks,

I have started a business recently. I am importing raw material to be supplied to composite parts manufacturer. I have not registered with Central Excise department yet. I have to pay BCD, CVD (along with cess), SAD on the CIF price. I have the following queries:

Can I take input credit of SAD? In case yes, then how?
Can I take input credit of CVD? In case, yes, then how?
If i can take input credit on CVD, then, how do I pass it on to my clients (manufacturers in my case)?. Should I charge CVD paid in my invoice (which would reveal my import price) or should I charge excise on both my costs and margin in the invoice

P.S I am ready to get my firm registered with Excise

Request the forum to please clear the air on the aforementioned issues.

Your Kind help is appreciated. Thanks in advance

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6 Replies

CA Tanvi Sheth (Consultant) (232 Points)
Replied 27 September 2016

Hello,

According to me, you might have not yet registered in Excise as limit for the same might not have met, and if you are covered under the definition of manufacturer, then please register under Excise.

As per the descripttion given, it seems you are involved in trading activity, no alteration from your end in parts imported. Trading is exempted from Excise and Service Tax.

If you want, you can pass on credit of SAD and CVD to the manufacturer. Once you pass it, you cannot claim it for yourself.

Rajat Gupta (12 Points)
Replied 27 September 2016

Yes Tanvi,

Thanks for your reply

You are correct in your assessment. I am not a manufacturer and exclusively involved in trading. I am selling the product to manufacturers and not final consumer.

If I have to pass the credit to the consumers, then would I be required to reveal my costs ( For obvious reasons, we dont want to reveal the CIF price of the product).

Further, if i don't want to pass it, then, how can i claim it myself

Regards

CA Tanvi Sheth (Consultant) (232 Points)
Replied 27 September 2016

If you want to pass it then directly pass the tax invoice with your bill to the manufacturer

Further if you want you can claim refund i guess, but that would be tedious job. So accordingly its upto you to pass it to the manufacturer, or to claim refund.

Also you have to pass on the original import invoice to the manufacturer so that, he can claim credit, so the cost will be disclosed therby.

Rajat Gupta (12 Points)
Replied 27 September 2016

Hi Tanvi

Sorry to bother you again.

If I want to claim the refund. Then, how can I do that?

Further, if i get my firm registed with excise, will this change the scenario?

Regards

Rajat Gupta

CA Tanvi Sheth (Consultant) (232 Points)
Replied 27 September 2016

For claiming refund you have to anyways get urself registered under excise, then submit the documents of import to the concerned adjudicating officer who will assess the feasibilty and would process the refund subject to some conditions to be fulfilled by you. the conditions for claiming refund are not much known to me.