Modvat by 1st & 2nd Stager Dealer

Hello-

Under Cenvat rules Can a 1st or 2nd stage dealer avail Cenvat credit against the Excisable purchases-

For example : Purchase Value is 1000 including modvat of 130.00

If the Trader sells this product at Rs.1500 including excise 

1 - what would be the applicable duty of excise @ 10.30%

2 - Whether Service Tax is leviable on such transaction in case if as i read Dealer can't avail modvat of excise duty

Replies (3)

Dear Rajeev,

1st Stage or 2nd Stage dealer cannot avail the Credit  pass by the manufacurer of a dealer (in case of 2nd stage).

In ur example u have increased your profit margin as selling the good at Rs 1500. No details of excise duty paid should be shown in invoice given by the dealer to buyer. Duty will be pass on prorata basis read Rule 11(7) and Rule 9(4)

And the service tax is not in the case of this transaction other wise any GTA services aviled by the dealer or supplier.

 

Thankx & Regards,

Chirayu

Dear Chirayu - Thanks for sharing your knowledge

Only a Manufacturer or a Output Service Provider is entitled to  avail Cenvat Credit on Excisable Purchases. Ist stage or 2nd stage dealer cannot avail Cenvat credit since cenvat credit is available only on manufacturing/removal  of excisable goods or rendering of output services.

 

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