CENVAT CREDIT

[Gopalarathnam Muralidharan]

1) A Company which has got excise registration as a manufacturer as well as dealer imports machinery and sell it as such

2) Now the question is whether the company can set off the CVD on excise payable or  CVD Credit has to be passed on to the buyer of machinery

 

[MUKUND THAKKAR]

Dear Gopalarathnam Muralidharan,

first   clearify  that  machinery  import  as  a  traders  or   Manufacturer?

If  machinery  is  purchase  as  a  tradsers , you  can  simply  pass the  excise(CVD)  to  your  buyer after  making  the  necessary entry in RG 23D register.

if  machinery is  import or  purchase as manufacturer, you can  take  the  cenvat  credit  of  CVD 50 percent and  balance  in  next  finalcial  year 50 percent   and  4 percent SAD, now  as  and  when  you  cleared  the  machinery  please follow  the  condition  of  cenvat  rules3(5). 

 

AI Summary

Cenvat credit on import duty: traders must pass duty to buyers; manufacturers may claim staged credit under rules. If the importer is a trader, CVD on imported machinery may be passed on to the buyer with appropriate entries; if the importer is a manufacturer, Cenvat credit of the CVD may be availed under the Cenvat framework in a phased manner and Special Additional Duty treatment must be observed, and on clearance the manufacturer must comply with the applicable Cenvat rule requirements for availment, reversal and record keeping.