Availing cenvat credit
This query is : Resolved
25 November 2015
Scenario:
We have outsourced the manufacturing of our product to two vendors.
Stage 1
Vendor One would manufacture raw material X and would sell it to us with Excise Duty.
Stage 2
We would supply the raw material Y to Vendor 2 for manufacture of Final Product.
Question
Is it possible to set off the Cenvat Credit availed from Vendor 1 for payment of excise duty to Vendor 2?
We have outsourced the manufacturing of our product to two vendors.
Stage 1
Vendor One would manufacture raw material X and would sell it to us with Excise Duty.
Stage 2
We would supply the raw material Y to Vendor 2 for manufacture of Final Product.
Question
Is it possible to set off the Cenvat Credit availed from Vendor 1 for payment of excise duty to Vendor 2?
Arun Kumar Singh
(Expert)
25 November 2015
Yes vendor 2 can pay the duty from cenvat credit taken on invoice issued by vendor 1 but the process should be amounts to manufacture.
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