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CENVAT

priyanka narale (PCC student) (407 Points)

05 December 2010

What r the provisions regarding eligibility of CENVAT credit on inputs used in R&D? what if the inputs r used for testing the quality of inputs prior to putting them in the manufacturing stream?? r they eligible??

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4 Replies

Sunali (Learner) (1317 Points)
Replied 05 December 2010

Hi Priyanka,

In general terms inputs used in R & D are not eligible for CENVAT since not used in relation to any manufacture of final products, however, in my opinion, if the same are used in the testing process of inputs which are to be ultimately used in the manufacturing process, the CENVAT will be allowable. The reason being that the said inputs are indirectly used in the manufacturing process.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 05 December 2010

Inputs used in R&D or testing qualify for input credit, but in audit stage assesee has to prove that the products are incomplete without R&D or testing, coz mere R&D is not part of manufacturing process, and the burden goes to assesee to establish between R&D and finish goods.
It is not necessary that the inputs are contained in final products for availing input credit.
for safeguard of assesee interest one has to obtain few test certificates or quality control certificates from own Quality Control Engineer on the dates when the R&D / Teasting has taken place, to establish the genuine requirements of such steps.

R.Sasi kumar (Junior Executive) (27 Points)
Replied 05 December 2010

Hi i'm working in a manufacturing concern I had a question if the sales is more than purchases in every month after 10yrs the credit in cenvat is more eg.666,00,00 then this amount is with government so we will adjust every month tax amount with this cenvat credit .I want to know when this credit adjusting is what with the govt when we get that credit amount.......

#$asi#

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 05 December 2010

Originally posted by : R.Sasi kumar
	Hi i'm working in a manufacturing concern I had a question if the sales is more than purchases in every month after 10yrs the credit in cenvat is more eg.666,00,00 then this amount is with government so we will adjust every month tax amount with this cenvat credit .I want to know when this credit adjusting is what with the govt when we get that credit amount....... #$asi#

if the sale is greater than purchase then how the cenvat credit can be accumulated, its needed to pay more on sales - purchase price, repost your query plz

there is no method to encash the accumulated credit export rebate of duty paid on exisable goods for export