Cenvat credit

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Sir,

I am a purchase executive and want to know when we purchase goods via issuing C Form to seller

who is going to avail CENVAT Credit we as a Purchaser or Seller from whom we are buying material?

here material is Raw Material basically output for a input and my company is a exporter and this material is use as a input for the final product packaging

company export adhesive and I procure Raw Material from manufacturer from other state by issuing C form then my company is eligible for CENVAT credit for the Excise and CST we had paid to them?

Replies (3)

if you are purchasing goods from a first stage dealer then you can be entitled to use the CENVAT Credit however if he is a normal dealer then you wont be eligible for CENVAT Credit.

mr. sagar-

hope this will help u-

C-Form is a certificate issued as proof of CST Purchase. This form can be obtained from sales tax dept. The seller has to obtained this form – C from the purchaser and show it to the sales tax dept to get tax exemption. In case if the purchaser does not release the Form – C the seller has to pay the Tax at the time of sales tax assessments.
 
Form C is issued by the dealer for purchasing goods from the dealer out side the state in which he resides the effect can be understood my looking at following example 
If Mr A Registered Dealer in Hyderabad (AP) wants to purchase goods from Mr B a registered dealer in Mumbai.Mr B who is selling the goods will charge VAT @ 4% or 12.5% on the goods if Mr A issues him “C” Form then Mr B should Charge him CST @ 2% so Mr A is SAving Tax.

It will be safe for the seller if he can get a D.D. for the tax amount of the goods which is sold to the purchaser. Because sometime the purchaser fail to provide the form – C to the seller due to unknown reasons, at this time this D.D. which is collected will be off much helpful to the seller.
 
 

 

CENVAT credit is in respect of central excise duty on goods purchased. Goods must be input and supported by Central Excise Invoice and the Finished Goods must be dutiable.

You can take CENVAT credit of Central Excise amount in the purchase value of goods if the Finished Goods are dutiable. In case of exports finished goods are dutiable but clearances are exempt.

If your finished goods are exempt from central excise duty you can not claim CENVAT credit whether you sale finished goods locally or export them.

There is no concept of CENVAT in Central Sales Tax. You can not take credit of Central Sales Tax paid by you on your purchases, whether purchases are against C Form or on Full tax payment.

Hope this is of some help to you.

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