How to route transaction for excise credits

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A is a manufacturer having excise registration and B is also a manufacturer having excise registration. A gives order to B for supply of certain machinery which includes a bearing to be supplied free of cost from A. Now the supplier of bearing bills it to a A and name of consignee is B. The bearing is directly delivered to B.

Ques.1 How the excise credit will flow to A ?

2 Will A make entry of purchase of bearing in its book and then entry of sale to B?

3. At what point of time credit of excise will be available to A?

emailid: caabhishekmaloo @ gmail.com

Replies (1)

Since the supplier is directly supplying the material to "B", "B" can avail cenvat credit based on the transporter copy.  After completion of machinery, "B" transfers the machinery to "A" by paying excise duty.  Mr. "B" has to consider the value of material obtained from "A" at free of cost for his final product.  Here "A" cannot avail the credit of bearing but can avail the credit on machinery.  "A" has to make entry of purchase of bearing and has to make entry for "Free samples/sales".


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