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Cenvat Inplications

kinnary (student) (231 Points)

06 April 2011

hello frenz,

i have a doubt regarding the excise duty and cenvat

example

Manufacturer X purchases raw material Y for manufactue of a final product.He also does trading for that raw material Y.Now he sells the purchased rawmaterial Ywithout using in the manufacture process.He paid the excise duty on such rawmaterial when purchase is done.Mydoubt here is,what are the CENVAT implications and what all items will come in the invoice issued for selling such raw material?

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6 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 06 April 2011

Raw material used in manufacturing final product is eligible for input credit but if final product is duty able.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 06 April 2011

Originally posted by : kinnary
	hello frenz, i have a doubt regarding the excise duty and cenvat example Manufacturer X purchases raw material Y for manufactue of a final product.He also does trading for that raw material Y.Now he sells the purchased rawmaterial Ywithout using in the manufacture process.He paid the excise duty on such rawmaterial when purchase is done.Mydoubt here is,what are the CENVAT implications and what all items will come in the invoice issued for selling such raw material?

at the time of selling raw materials he has to reverse the credit of duty taken on material Y.

he has to use his home consumption invoice to sell out the raw materials, he has to make a note in invoice regarding original duty taken position and reversal of same.

HS Negi (Senior Executive- F&A) (590 Points)
Replied 06 April 2011

Yes, I agree with U.S. Sharmaji.

Regards

HS Negi

NARENDER PAWAR (CA final Student) (337 Points)
Replied 07 April 2011

yes i am also agree with mr. U.S. Sharma

Durga prasad Ambati (Taxation, Pursuing CA) (737 Points)
Replied 07 April 2011

Im agree with US SHARMAJI,, seperate invioce is raise for raw material Y. and reverse the Excise Duty, and mention in that invioce ," REMOVED AS SUCH"

don't include raw material Y in the removal of finished products Invioce. seperate serial number is allocate for remove as such.

CA AMANPREET SINGH (Chartered Accountant) (284 Points)
Replied 07 April 2011

Originally posted by : Durga prasad Ambati
	Im agree with US SHARMAJI,, seperate invioce is raise for raw material Y. and reverse the Excise Duty, and mention in that invioce ," REMOVED AS SUCH" don't include raw material Y in the removal of finished products Invioce. seperate serial number is allocate for remove as such.