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Query in excise relating to cenvat credit

HS Negi (Senior Executive- F&A) (590 Points)

17 August 2010  

Dear All,

 

We are a manufacturer of excisable goods in Faridabad (Haryana). We sells our finished products through the network of  our authorized dealers appointed across   India . Now We have got a order from one of our Gujrat Based dealer who is not registered in Excise. We have raised the invoice charging excise duty & sales tax as bill to ship to Gujart Based dealer . Now Gujrat based dealer endorsed the invoice along with LR copy in the name of end customer in transit, who is in Gurgaon (Haryana).

 

This transaction in sales tax terms is called E-1 Sale. This transaction in sales tax terms is permitted . My query is , Can Gurgaon based end customer take the excise benefit on basis of our invoice along with endorsed GR copy & and commercial invoice of Gujrat based dealer ?

 

Please guide, is there any ruling in excise so that cenvat credit can be claimed by end customer ?

 

Regards,


 18 Replies


(Guest)

As permy knowledge the end user cannot claim the benefit of the excise. For taking the CENVAT credit the goods are to be used in the manufacture of some other product as the input or the goods are to be used in relation of the manufacturing products like the capital goods. Excise basically attempts to prevent the cascading effect of tax on tax, coz the end user doesnt carry out any manufacture, he does not sell and does not collect tax on the same, so logically no cascading effect and hence credit cannot be claimed. pl confirm the information with the other posts to this query

1 Like

CA Arindam Sain (Practice) (308 Points)
Replied 19 August 2010

Ya Revati is correct and nicely discussed your isse. As you dealer and end user is not a manufacturer so they did not use your goods as their imput for manufacturing....transaction between your dealer and end user is a mere sale for use not for manufacture as explained in your query....so none of them are entitled to take Cenvat credit.

C.V.R.SARMA (SERVICE) (90 Points)
Replied 11 September 2010

It is presumed that your end customer is in the field of manufacturing activity as it appears that he has to avail the input credit on the goods purchased. As your dealer is not registered under Central Excise, you have to endorse the address of the end customer on the invoice issued by you .i,e., delivery at the end customer and billing address is your dealer. In such a case, your end customer would not loose the input cenvat credit.

No support of case law is required for availing this, as this is the practice being followed by many manufacturers.


 

R P Ananthakumar (Sr. Officer - Central Excise/Cash)   (514 Points)
Replied 14 October 2010

They are not eligle to take cenvat credit .  The Cenvat Credit is admissible in respect of inputs, which are brought in to a factore for use in or in realetion to the manufacture of the final produts.  As a dealer, as per vat, they can take credit sales tax amount

VIKAS AGARWAL (MANAGER) (44 Points)
Replied 22 December 2010

Hi all, i want to know that what treatment should in Excise record of Debit/Credit Note. eg. i have billed to party with excess amount and invoice contaning Excise duty and sale tax as well, later on i realized that it was excess billed, hence i raised a credit note to party as a result now my excise duty become lesser than earlier billed amount. now i want to know can i take cenvat credit or reduce my excise expenses in excise records on basis of this credit note? if yes kindly let me know under which provision?

VIKAS AGARWAL (MANAGER) (44 Points)
Replied 22 December 2010

Hi all, i want to know that what treatment should in Excise record of Debit/Credit Note. eg. i have billed to party with excess amount and invoice containing Excise duty and sale tax as well, later on i realized that it was excess billed, hence i raised a credit note to party as a result now my excise duty become lesser than earlier billed amount. now i want to know can i take cenvat credit or reduce my excise expenses in excise records on basis of this credit note? if yes kindly let me know under which provision?
1 Like

bikash (audit manager) (21 Points)
Replied 17 January 2011

Dear all,

Kindly advice me on th issue that,in case of debit note where our seller has billed us for more than negociates rates and we have give them a debit note for excess amount  now the question is can we issue a debit note for excess billed amount of excise.

Thanks in advance

Jeevesh Mehta (Advocate- Corporate Commercial & Indirect Tax Advisory)   (861 Points)
Replied 17 January 2011

Dear Mr Harinder Singh Negi,

CENVAT is a destination based facility. Therefore the customer in gurgaon can take the credit on the bases of your invoice. The point which needs to be looked into is that your customer in gujrat is not registered under excise as dealer to be capable of issuing cenvatable invoice.

But provisions of CENVAT Credit rules do permit such availability of CENVAT on your invoice. What Mr CVR Sarma have said is right.  The name of the final consumer should be mentioned as consignee on the invoice.

 

Regards

 

U S Sharma (glidor@gmail.com) (21031 Points)
Replied 18 January 2011

dealer cant pass the excise content without having registration with excise for dealership. 

endorsement of excise invoice is not permitted for input credit, 

if u mention the name of consignee in excise invoice and same is noticed by vat office, then your sales under E-1 would go taxed as normal CST sales,

1 Like

HS Negi (Senior Executive- F&A) (590 Points)
Replied 24 January 2011

Thanks for U.S. Sharmaji.

Regards

Harendra Singh Negi

Mandar (DGM - Internal Audit) (52 Points)
Replied 21 February 2011

Dear All,

 

We are a manufacturer of excisable goods in Haryana. We sells our finished products through the network of  our authorized dealers appointed across India . Now We have got a order from one of our Gujrat Based dealer who is not registered in Excise. We have raised the invoice charging excise duty & sales tax as bill to ship to Gujrat Based dealer . Now Gujrat based dealer endorsed the invoice along with LR copy in the name of another manufacturer in transit, who is in Gujrat .

 

My query is , 1) Can Gujrat based manufacturer take the excise benefit on basis of our invoice along with endorsed LR copy & and commercial invoice of Gujrat based dealer ?

 

Please guide, is there any ruling in excise so that cenvat credit can be claimed by 2nd manufacturer received goods from non manufacture register delear on bill to ship to basis from 1st manufacturer ?

 

2) What will be answer if Gujrat based delear is unregistered delear?

 

Regards,


 

U S Sharma (glidor@gmail.com) (21031 Points)
Replied 26 February 2011

Originally posted by : Mandar

Dear All,

 

We are a manufacturer of excisable goods in Haryana. We sells our finished products through the network of  our authorized dealers appointed across India . Now We have got a order from one of our Gujrat Based dealer who is not registered in Excise. We have raised the invoice charging excise duty & sales tax as bill to ship to Gujrat Based dealer . Now Gujrat based dealer endorsed the invoice along with LR copy in the name of another manufacturer in transit, who is in Gujrat .

 

My query is , 1) Can Gujrat based manufacturer take the excise benefit on basis of our invoice along with endorsed LR copy & and commercial invoice of Gujrat based dealer ?
- NO excise benefit on endorsed invoice. the 1st party has to obtain dealer regn to pass out the excise contents. 
 

Please guide, is there any ruling in excise so that cenvat credit can be claimed by 2nd manufacturer received goods from non manufacture register delear on bill to ship to basis from 1st manufacturer ?

 - dealer registration is required to pass on the excise benefit to subsequent buyer.

2) What will be answer if Gujrat based delear is unregistered delear?

 

Regards,


 

Basavaraj (Accountant) (23 Points)
Replied 14 June 2011

dear sir i m a electrical delaer and excise registered i purchased a meterial from a dealer, and manufacture issued a excise invoice putting my name as consignee now i have to issue excise invoice to end customer my dealer is refused to issue the excise invoice waather is it possible to pass the excise duty by the base of manufature what he issued the invoice putting my name as consgnee. kindly adavice me for the same

U S Sharma (glidor@gmail.com) (21031 Points)
Replied 15 June 2011

Originally posted by : Basavaraj
dear sir i m a electrical delaer and excise registered i purchased a meterial from a dealer, and manufacture issued a excise invoice putting my name as consignee now i have to issue excise invoice to end customer my dealer is refused to issue the excise invoice waather is it possible to pass the excise duty by the base of manufature what he issued the invoice putting my name as consgnee. kindly adavice me for the same

check your excise invoice again, if it contain your name/ address/ registration number , then without any hesitation you can take the same to RG23D register and issue cenvatable invoice, 

as in manufacturer/ dealer invoice, there is no space for "consignee" but for buyer, so if your name is p0ut there, you are free to locate the invoice in exisable system.

in absence of such details, ask manufacturer to enter the details in invoice sent to you.


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