Renewal of 57 f4

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navin oswal

Articled Assistant

22 Points Posted on 21 November 2011

I have certain capital goods imported. Those capital goods are to be sent to Job worker which are used as designs to make parts. These parts are to be used as raw material for our final product. Capital goods (design ) will be with the job worker for around 1 year. But the 57F4 criteria states that the material should not be out for more than 180 days.

Can we put in 180 days and renew it again???

Replies (2)

CA Unnikrishnan Nair N

Chartered Accountant

2114 Points Posted on 21 November 2011

You have reverse the credit if capital goods are not returned within 180 days. But you can take the credit again when the goods are received. Else, you can show that the goods the returned within 180 days and again sent out by issuing fresh chalan.

Sanjay Gujar

Manager-SCM

44 Points Posted on 21 November 2011

Now the present rule for job work is Rule 4(5)(a) of CENVAT CREDIT RULES, and not 57F(4).

Goods cleared from the factory for job work, on which CENVAT Credit has been availed, then it should come back to factory, within 180 days. If not returned, then reversal of CENVAT credit is mandetory. After receipt back of total qty. of goods, reversed CENVAT credit can be taken.

Other option is to send total qty. imported, directly to the job workers premises. After confirmation for receipt of goods by job worker, factory should send job work challan. CENVAT credit should not be avail till total qty. returned back to factory. This will avoid reversal & recredit of CENVAT credit.