input tax credit

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KRISHAN CHAND (Querist)
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24 July 2010 A Ltd. Company two different deptt. account and excise .Company purchase epoxy for manufacturing semiconductor and store outside the factory in rented godown . In this case accounts deptt. take niput credit of duty at the time of receiving invoice of party but but excise deptt. take input when latter material of this item will be consume and new will come into the factory. Excise deptt. said that they can take input only when material come into the factory. Please tell me the solution of this situation .How the both deptt. take credit at same time?

ADITYA

ADITYA (Expert)
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08 August 2010 Cenvat Credit is allowed only as per Cenvat Credit Rules prescribed by the Govt. Your Company's Excise Department is right for not taking the credit on material stored in the rented godowns outside the factory premises.

You can ask your accounts depatment to open new account "Cenvat to be Receivable" or "Cenvat Receivable - Godown" for such out side stored material and as usual account "Cenvat Receivable".
Both Accounts to be reconciled at regular intervals to avoid any wrong credit.

I hope this will satisfy both of your departments.

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