CENVAT Credit

[Arti Gupta]

We have manufacturing units all over India.

We often come across these cases where invoices shall be in the name of one unit. Later on, the total costs including taxes & duties are debited to other units through inter division accounts.

 We seek first unit to get revised invoices of the parties to enable us to avail CENVAT. This has been hard for both of us (transferee and transferor) .

If one unit gives debit to second unit  with service tax/excise duty where invoice is in the name of other unit whether CENVAT is available to second unit.

 Please clarify the position.

AI Summary

Manufacturing firm seeks clarity on CENVAT credit eligibility for costs transferred between units via inter-division accounts. A manufacturing company with units across India faces challenges in availing CENVAT credit when invoices are issued in the name of one unit, but costs are transferred to other units through inter-division accounts. The company seeks clarification on whether the second unit can claim CENVAT credit when debited with service tax/excise duty under such circumstances. One suggestion is to register under LTU, ISD, or obtain a Centralized Registration Certificate for service tax. Each unit is separately registered with the Excise Authority and provides output services, complicating the CENVAT credit transfer process.