Trading of inputs

[CABALRAM PANDEY]

Dear All,

 

I request you all for your kind opinion on the following issue.

 

A Manufacturer of plastic chair purchased granuals(Master) as input for its manufacturing activity. Due to some reasons now he is not able to use those granuals (Master). Now the manufacturer wants to sell those granuals (Master). He has a RC for item Fbric, CETSH No. 39201012. Kindly put your kind attention on the matter with following questions?

1. Whether further registration required for new CETSH no. for granuals.

2. What should be done for removal of inputs as such, on which CENVAT Credit taken but not utilized.

3. IF any special procedure required for this.

 

Thanks & Regards

Balram Pandey

[email protected]

[YAGAY and SUN]

You can remove the inputs/raw material as such on reversal of equivalent CENVAT credit.

[CABALRAM PANDEY]

Dear sir,

my question is this .........

1. Whether further registration required with new CETSH no. for granuals. We have already CETSH for Fabrics.

[YAGAY and SUN]

Yes, you need a trading licence under C.E., VAT/CST/Entry tax etc.

[Shrikant Joshi]

You have mentioned due to some reasons these granuals can not use in manufacturing activity.  Now the issue is whether to go for Trading RC. 

You have not purchase these granuals for sale,  secondly this is not continuous process of sale and you do not have to make profit motivation. 

This is only one time activity therefore Trading RC is not required.

 

 

[YAGAY and SUN]

In case of One time activity, then, there is no requirement to get the registration certificate for trading but the rawmaterial will be removed as such and CENVAT credit will be reversed proportionately.

[R MUTHURAJ]

Dear Shri.BALRAM PANDEY,

Let me opine my answers for your questions one by one.

1. Whether further registration required for new CETSH no. for granuals.

(No further registration is required for the new CETSH, since during your application for registration might have been already given three major Excisable Input items of manufactured / Warehoused or Traded)

2. What should be done for removal of inputs as such, on which CENVAT Credit taken but not utilized.

(As others have clearly told, you are required to reverse the Cenvat Credit availed on the input item and removing the same as such)

3. IF any special procedure required for this - (No any special procedure is requied)

 

Regards,

R.Muthuraj

[CABALRAM PANDEY]

Many Many thanks to all of you specially Mathuraj Sir, You had cleared all my doubts in the manner which they had arises Thanks once again. 

Dear Pandey

 

Ans to question No1

It is not required to registed  with Raw material CETSH code as he must have already  declared this Raw material with CETSH code at the time of filling ER-5 retuen.

Ans to questions no 2

When cenvat credit taken but not utilized , then total credit should be reversed , how ever if the tranjection value is more , than the earlier tranjection value . he should pay the duty on tranjection value which is more than earlier credit taken. Please note in no shch case the reversea credit should not be less than earlier credit. 

Ans to questions no3

He has to be clearly mention in the invoice remove as such with ref to earlier credit taken

 

By Kishore  Raut

 

AI Summary

CENVAT credit reversal required when inputs are sold as such; pay duty if removal value exceeds earlier credit claimed.
Where CENVAT credit has been availed on inputs subsequently removed and sold as such, the manufacturer must reverse an amount equivalent to the credit claimed; if the transaction value on removal exceeds the earlier credit, duty must be paid on the higher transaction value so the reversal is not less than the credit earlier availed. The removal invoice should state the goods are removed as such and reference the earlier credit availed. A new CETSH registration is not required if the input was already declared and a trading registration is generally unnecessary for a one time disposal.