CENVAT Credit on input used for New Product development Department

[Pradeep Jain]

Sir,

We are having new product development department , where in inputs purchased  consumed for , different trial testing and innovation purpose , we do captalised the input cost incurred  on this account.

The said product developed may be  introduced in to the market within 1-2 year.

Now querry is that:-

Are we entitled to avail CENVAT credit on the purchase of inputs used for the future development of new product. ?

Regards

 

Pradeep Jain

 

AI Summary

Eligibility to Claim CENVAT Credit on Inputs for New Product Development Confirmed Under CENVAT Credit Rule, 2004. A query was raised regarding the eligibility to claim CENVAT credit on inputs used in a new product development department, where inputs are consumed for trial testing and innovation. The concern was whether credit could be claimed before the product is introduced to the market. Responses clarified that manufacturers can immediately claim CENVAT credit on inputs used for taxable services, as research and development are integral to manufacturing under the CENVAT Credit Rule, 2004. It was noted that credit reversal is necessary if input goods are fully or partially written off in the accounts.