CENVAT Credit concept

Please Reply to....An Organisation having 2 units , one is manufacturing concern and the another is Ltd. Co. Which deals in trading activity. Manufacturing concern purchases goods from local and Inter State purchase on which  it pays excise duty and  Sales to it to its another unit i.e. Trading Concern and also to others.

Now my problem is ...Can manufacturing concering avail the CENVAT credit on sale to its Trading concern and also to Others?

Hi Ashish,

In your query you asked that whether the manufacturer can avial the Cenvat Credit on saererles to its another unit and also to others.

Donot get confused with the Cenvat Credit Rules, He cannot avail the Cenvat Credit on sales but he can avail the Cenvat Credit on the purchases made local, interstate and also imported rawmaterials and whatever Central Excise duty paid by him for his purchases he can fully avail the Cenvat Credit.

In your case for example, in the month of November if your manufacturer purchased a Rawmaterial local or interstate of Rs 2,00,000/- for this Central Excise Duty will be Rs 20,600/-. By using this rawmaterial he prepared the finished goods i.e Final Product and removed this final product from his premises under the central excise invoice to his trading co or to others. The value of final product will be sum of Rs 3,00,000/- for this the Central excise duty will be Rs 30,900/-.

Here the Central Excise Duty payable for the month of November before 5th 0f December will be Rs 10,300/- (Rs30,900 - Rs 20,600)

Regards

Deviprasad G.K